Adding to gains achieved in Tuesday night’s Access tradingsession, natural gas futures spiraled higher Wednesday as tradersprobed into uncharted price territory in reaction to anotherbullish storage report. Fueled by that buying pressure, theDecember contract finished 24.9 cents higher at $6.265, almost$2.00 above lows notched two weeks ago.

The American Gas Association reported its first storagewithdrawal of the winter, saying a net 6 Bcf of gas was taken fromstorage last week. A total of 11 Bcf was withdrawn in the WesternConsuming region while 4 Bcf was injected in the East and 1 Bcf wasinjected in the Producing region. Working gas levels at the end ofthe week fell to 83% full or 2,732 Bcf, which was 274 Bcf less thanat the same time last year and 155 Bcf less than the five-yearaverage.

A Houston-based risk manager was quick to point to smallpull-backs during trading Tuesday and Wednesday to $5.80 and $5.90,respectively, as an indictor of a real lack of quality sellers inthe market. “What you have is selling by people trying to pick atop. As soon as they see the market stall, they cover their shortsand drive prices right back up. Despite how high prices arealready, it is safe to say that people who have already tried topick a top have been burned and thus are a little nervous.”

Another phenomenon that has played to bulls’ favor is theemergence of concentrated buying in Access trading. “People arerealizing that their actions speak much louder when the pit isempty. A 400-lot buyer who might be able to move the market 3 centsduring the regular outcry session, is finding that they can pushthe market 30 cents if he does his buying after-hours,” the riskmanager continued.

And while these market-manipulating methods may seem a littleunderhanded, they are not without fundamental validity. Accordingto the latest six- to 10-day forecast released by National WeatherService Wednesday, almost the entire country is expected to seebelow-normal temperatures through the end of the month. For manytraders, the influx of cold air, both outside their windows and intheir weather forecasts is enough to make them eschew the shortside of the market for the time being. “This winter’s weather isguilty of being cold until proven otherwise. Right now, there islittle to suggest that those forecasts are wrong,” a trader said.

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