Likely

Even with much of its cold weather support disappearing, thecash market still found cause for moderate bullishness Wednesday.But that’s expected to pale in comparison to the fireworks thatsources were predicting for today after the screen exploded withgains of more than 35 cents in both the November and Decembercontracts following AGA’s below-expectations storage report.

Pardon the cash market if it was getting that old sensation ofdeja vu Wednesday. In an almost exact repeat of a week earlier,prices were rising somewhere in the vicinity of a dime in mostcases; but once again the screen took a dive following theafternoon storage report, prompting sources to predict today’strading will emulate the double-digit declines of last Thursday.

Cash traders returned from the long holiday weekend Wednesday tofind most of the market turning considerably softer, and it’s asafe bet that prices will keep falling today, since the entireenergy futures complex was getting clobbered Wednesday, sourcessaid.

How low can you go? Some traders likely were asking themselvesthat very question Wednesday afternoon after seeing cash pricescrater by about 20 cents or more at nearly all points that morningand then watching the screen go into a swoon immediately after theAGA storage report, which means the cash market is expected toregister big losses again today.

The cash market was very much a mixed bag Monday, with largerebounds in the West arrayed against small price movements up anddown (but more down than up) in the East. However, because thegreat majority of the screen’s dazzling display of strengthoccurred following the close of cash business, sources found reasonto expect a bullish market in physical gas today even without muchweather-related support.

Prices softened as expected Wednesday in response to partialabatement of the heat wave that plagued the Northeast and MiddleAtlantic earlier this week. But based on the sharp spike in futuresfollowing the afternoon release of AGA’s storage report, sourcesshowed no hesitation in saying they expect cash to return to anupward direction today.

Cash prices were unable to sustain this week’s earlier upwardmomentum and were turning modestly softer Wednesday. Severalsources expected declines to grow greater today since most of thescreen’s dive of nearly a dime Wednesday followed release of AGA’sstorage report, well after cash trading had been completed.

Ask two traders about the direction of the natural gas futuresmarket and you will likely get two different opinions, and that wasnever more true than last week when Tom Saal of Miami-based PioneerFutures and Tom Riley of Riley Natural Gas spoke about hedging forproducers at GasMart/Power 2000 in Denver.

The numerous energy transaction Internet sites are likely toconsolidate leaving somewhere between one and six viable sites,executives of three of the leading sites told a GasMart/Power 2000audience in Denver last week.