The AGA storage report proved to be an anchor on natural gasfutures prices yet again on Wednesday, as the spot June contractfell 5.2 cents to settle at $2.204. The latest report came in at100 Bcf worth of injections, which increases the surplus versuslast year by 30 Bcf to 403 Bcf. Total estimated volume came in at59,231.
More bearish signals emerged during Access trading last night,as the June contract remained below the $2.20 mark. “That’s notgood for prices, especially since cash market prices came in in thelow $2.20s today, May (cash prices) should be trading at a discountto the futures, not the other way around,” an analyst said.
Despite yesterday’s weakness, one source remains convinced theoverall price bias is to the upside. Based on the currentsupply/demand balance, and after factoring for the present storagesurplus, another source feels any significant disruption in themarket “could easily send the July contract up to $3.20. Eitherextreme heat or even the threat of a hurricane could do that. I’lltell you this, speculators are well aware of that, and that’sexactly the reason why we haven’t seen prices below $2.00 for along while,” she said.
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