Natural Gas futures slipped lower for the second day in a rowyesterday as light scale-down industrial buying was no match forcommercial and fund selling. The November contract traded to itslowest price in ten weeks at $2.52 before settling at $2.586, 3.9cents lower on the day.

A one-two combination of trade and fund selling initiated themove lower Tuesday morning, said Ed Kennedy of Miami-based PioneerFutures. “At that point, speculators took over and were successfulpushing the market through sell stops below $2.60.”

The only positive feature of the session, Kennedy added, wasscale-down buying by industrial users eager to take advantage ofattractive winter pricing.

A Chicago-area marketer agreed that it was difficult to gleanmuch constructive from yesterday’s price action. “We broke belowthe November’s 100-day moving average [Tuesday] and there is norelief in sight. I wouldn’t be the least bit surprised if pricestumbled below the 200-day at $2.465 before the week is over.”

Looking ahead at today’s pre-AGA session, Kennedy warns thatbecause the market is “extremely oversold” there is a chance thatprices will bounce. However, he feels that until the market learnsof new (and cold) winter weather forecasts, it will be difficult tosustain a rally. He calls support in the low $2.50s and predictstoday’s storage report will show a 69 Bcf rise last week.

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