The seesaw battle continued Wednesday in the natural gas pit atNymex, but in contrast to the modest gains posted during tradingMonday and Tuesday, yesterday’s session saw the bears regaincontrol. After opening at what would be its high for the day, theMarch contract drifted 6.3 cents lower to settle at $1.775, just apenny off its low.

Some traders were surprised by the market’s weakness in the faceof gains posted earlier in the week and cooler weather expectedthis weekend in parts of the Midwest and Northeast. However, amarketer felt it would take more than “a brief period of coolertemperatures” to push the market outside of its recent $1.72-84trading range.

Another cash trader agreed, adding that contrasting fundamentalsand technicals have placed the market in an interesting dilemma.”Fundamentally we are defying gravity with storage and weatherpointing to lower prices. However, almost any technical wizard Italk to is looking for prices to trend higher,” he said. “To behonest, I am inclined to side with the bears on this one — that isunless you think 60 degrees in Boston or 70 degrees in Tulsarepresent some sort of cooling demand,” he quipped.

Although it was no laughing matter, another Midcontinent traderthought it was “funny” that he was hearing of people actuallyinjecting gas into the ground in the second week in February. Forthe third week in a row last week the market failed to withdrawmore than 100 Bcf from underground storage facilities.

Coming too late to affect trading yesterday, the American GasAssociation reported that 93 Bcf was pulled from the ground for theperiod ending Feb. 5. Although that figure was nestled betweenexpectations in the 100-120 area and last year’s tally of 81 Bcf,it paled in comparison with the five-year average for the week of150 Bcf. Last night Access dealings had the March contract a 1.2cents lower at $1.763.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.