Despite much-above- normal temperatures across much of the U.S.,natural gas squeezed out small gains at the New York MercantileExchange yesterday in a mostly dull trading session. Throughoutmost of the day the March contract looked as if it would closeunchanged, but a late rally put a positive spin on the day’sevents, nudging the prompt month 2 cents higher to finish at$1.838. Estimated volume, registering a measly 37,697 contracts,confirmed the sluggish nature of the market.

And so with little to look back on, the market now looks towardthe release of the American Gas Association (AGA) storage reporttoday. The Pegasus Econometric Group of New York is looking for a100-120 Bcf withdrawal which, they feel, will compare favorablywith the 82 Bcf seen last year. “Without a shift in the weather, weanticipate a flow of short covering from here to the March futuresexpiration. [If] aided by colder temperatures. the gains could bedramatic,” the group wrote in its Natural Gas Report yesterday.

Tom Saal of Miami-based Pioneer Futures takes a slightly lessbullish slant. “The market is showing rising bottoms which showsthe willingness on the part of buyers to step into the market atincreasingly higher levels.” However, Saal would not come right outand endorse a bull trend. “It’s like I tell my kids in the car whenthey ask how much farther until we get there: ‘we’re closer than wewere before’.”

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