Buoyed by technical bullishness, combined with strong buyinginterest in the summer months, natural gas futures moved higherWednesday as buyers focused their buying not only on the promptmonth but also on the bargain-priced summer strip. The Marchcontract finished at $6.235, its 47.1-cent gain narrowly surpassingthe 37.5 advance achieved by the April-October strip.

For local technician Ira Hochman, it was the market’s inabilityto even retest a key momentum number at $5.77 that put the bulls incharge yesterday. “Rather than look at what the market has doneover the last few days, you had to look at what the market failedto do. Each time we have moved below $5.77 over the last week, thesellers have failed to push it lower. Until the market can developbelow that area, it is a good level to buy dips.”

Looking ahead, Hochman looks for continued choppy tradingthrough the rest of the month and believes that the market couldmove sideways-to-higher during that period. If that is the case, hesees potential selling at the top of the chart gap at $6.43 thatwas created by Monday’s lower open. Above that area, he targets$6.70 as another level of potential resistance.

And while it was technical buying that bolstered March prices,fundamental factors were cited as reasons for the strength in theout-months. “We have witnessed the March-to-summer-strip-spreadnarrow considerably over the past week and that can be attributedto buyers of all likes, stepping up to take advantage of lowersummer month values. “Industrials are finding that they can switchback to natural at these levels. Marketers who own power generationfacilities are looking ahead to their summer requirements. And nowthat it appears that they will make it through the storagewithdrawal season with plenty of gas, utilities are starting tothink about managing their injection loads,” he reasoned.

According to the American Gas Association, 105 Bcf was pulledfrom underground storage facilities last week, leaving 1,136 Bcf orroughly 34% of an estimated full capacity of 3,294 Bcf. Andalthough March prices advanced more than 30 cents during the last70 minutes of trading yesterday, few traders were willing to labelthe storage report bullish. Heading into the report, expectationsfor the withdrawal ranged from 80-120 Bcf. Last week the AGAannounced that storage decreased by 128 Bcf and the week beforethat the net-takeaway was 90 Bcf.

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