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For the second day in a row Tuesday, natural gas futuresreceived a strong boost in prices from short-covering activity dueto tropical storm concerns in the Gulf of Mexico. Earl became thefifth named storm in the 1998 Atlantic hurricane season yesterdaywith sustained winds of 60 miles per hour. As of 5:00 P.M. EST Tuesday, Earl was located 240 miles South Southwest of New Orleansand moving toward the Northeast at 12 mph. The October contractopened strong and wasted little time in trending higher before anafternoon sell-off left the market with a modest 3.4 cent gainbefore the closing bell. Estimated volume was a robust 82,172.

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Expect weakening prices and slow gas demand growth this year,the Energy Information Administration said last week in a sharpdeparture from earlier forecasts. Its July Short-Term EnergyOutlook is based on first-quarter data that show a “surprising”5.1% decline in industrial gas use compared to the same period in1997, despite a 3.4% increase in industrial output by gas-intensivemanufacturers.

It seemed reasonable to expect that with the Henry Hub futuresprice barely budging on its last day of trading, cash numbers forMay wouldn’t be moving much in either direction either, as a coupleof sources said prior to the screen expiry Tuesday. Yet tradersreported prices rising a few cents in several markets in afternoondeals. A marketer whose Chicago citygates were in the low $2.30sMonday submitted quotes in the mid to high $2.30s Tuesday. AndPermian Basin gas traded at $2.08-09 most of the day but bumped upto $2.11-12 after the screen closed, a producer said.