Following a two day, 18-cent price slide, the natural gasfutures market held its ground yesterday as traders were reluctantto push very far from center ahead of the release of fresh storagedata. The October contract was held to a tight 7-cent tradingrange, finishing 0.1 cents lower at $2.426.

Bull traders were impressed by the market’s resistance to movelower following Tuesday’s sub-$2.43 close. For many traders andchart watchers, the $2.43 level, which corresponds to the Oct lowfrom Sept. 2, represented a significant level of support.Meanwhile, bears were at a loss to explain the market’s inabilityto continue lower to narrow the gap with September physical prices.NGI’s Henry Hub index for today is $2.29.

Tom Saal of Miami-based Pioneer Futures is not surprised by thecash-futures spread and points to “Chamber of Commerce weather” anddecreasing available storage capacity. “Weather is perfect overmuch of the country and people are turning off their thermostatsand heading out of doors,” he said. “As the available storagecapacity decreases, the intrinsic value of that [empty] spaceincreases, which serves to widen the basis between one month andthe next. It happens every year,” he added.

Taking into account last week’s 78 Bcf injection, the AGAestimates storage levels are currently 2,746 Bcf or 85% full.However despite the 78 Bcf figure far outpacing last year’s 52 Bcfinjection, the futures market moved 6.1 cents higher last night.”It wasn’t how the report stacked up against last year, but ratherhow it compared with expectations,” said Saal. “I talked to anumber of brokers today on the floor and the consensus was 85 to100 [Bcf].”

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