Exert

Feeding off Wednesday’s weakness and reflecting fading concernsthat any of the three tropical systems would reach the gas-richGulf of Mexico, the futures market tumbled lower yesterday as bothcommercial and speculative traders exited long positions. Theresultant price slide left the September contract just penniesabove its $2.90 low for the week and turned several bulls intoshort-term bears. The prompt month finished 8.2 cents lower at$2.948 shortly after notching a $2.93 low late in the session.

Technical factors exert their influence on the natural gasmarket on a daily basis, confounding some traders while rewardingothers. Sometimes technicals are in agreement with underlyingfundamentals as was the case throughout the month of September,when supply tightness met with chart patterns and trend lines thatwere flashing buy signals. The end result: a rally that lifted theOctober contract 40 cents for the month. But, oftentimes thesefactors are not in concert, and trading thus far in October hasbeen just that. Whereas storm-related supply shut-ins supported themarket in September, October has been relatively free of supplydisruptions. That, coupled with U.S. storage inventories nearlyfull, has created an oversupply situation which has weighed onprices most of the month.