Bulls

Despite moderating temperatures pervading much of the countryyesterday, gas futures were able to inch higher and take back asmall portion of recent losses as traders positioned themselvesahead of the release of fresh weather and storage news. March andApril contracts closed up 4.5 cents a piece at $2.54 and $2.507,respectively, while the 12-month strip grew 3.3 cents to $2.614.

Natural gas bulls never got a chance yesterday as traders shedlong positions in sympathy with falling cash market prices and inanticipation of warming temperatures this week. By the time thedust had cleared and the orders were tabulated, the March contracthad slipped a cool 18 cents lower, tumbling beneath several keylayers of support and easily negating last Friday’s impressivegains.

Following a three-day, 25-cent price spike, the natural gasmarket cooled its heels Thursday as traders took profits amidtechnically overbought conditions and ahead of the weekend. After alate morning push failed to surpass Wednesday’s $2.78 high, sellerscame out of the woodwork to deliver the March contract a dime lowerto $2.659.

Fueled by the East’s worst winter storm in four years, naturalgas futures erupted higher at the open yesterday as tradersestablished new longs with confidence.

Fueled by continued below-normal temperatures and amidconflicting weather forecasts, natural gas futures galloped higheryesterday as institutional investors covered short positionsestablished over the past two and a half months.

Whether it was too much holiday turkey or possibly just a postY2K letdown, the natural gas futures market began the year insomewhat of a funk last week as traders showed an unwillingness topush prices very much on either side of unchanged.

Much like the day before, cash prices rose by a dime or moreTuesday almost purely on weather fundamentals. Unlike the daybefore, western points failed to lag behind the overall marketlargely due to some supply shortness. The result was generallytight basis all around, ranging from the Rockies in the $2.30sthrough the Gulf Coast and Midcontinent in the $2.40s and Midwestcitygates in the $2.50s to Appalachia and California in the $2.60s.Only Northeast citygates in the $2.80s and $2.90s put muchappreciable difference between themselves and the rest of themarket.

Fueled by forecasts calling for cooler weather next week,natural gas futures rumbled higher yesterday as traders cashed inon newly established short positions. After opening above keyresistance at $2.36, the January contract moved sideways for mostof the session before erupting higher at the closing bell. TheJanuary contract finished just a fraction of a penny off its dailyhigh, up 8.9 cents to $2.393.

After a lower opening failed to attract follow-through selling,natural gas futures rallied Friday as traders covered shorts aheadof the weekend. The December contract notched its low for the dayat $2.755 in the first hour of trading before bubbling higher tofinish at $2.884, a 5.8-cent advance on the day. Estimated volumewas above-average, with 80,226 contracts changing hands.