Speculators

Feeding off bullish weather forecasts, the natural gas futuresmarket snapped back yesterday as local and fund traders added totheir growing long positions. That enabled the November contract toerase Thursday’s 13.6-cent downward retracement and retest the$3.00 level in active, pre-weekend dealings. The prompt monthfinished strongly and closed at $2.975, a 14.1-cent advance on theday.

For the fourth straight trading session, natural gas futuresraced off to a fast start Wednesday as locals and speculators triedagain to push the market through key resistance and above therecent trading range. But unlike the failure and subsequent sellingthat plagued the market on the prior three occasions, yesterday’smarket was able to hold on and add to gains late in the day. TheAugust contract finished at $2.253, up 5.5 cents.

Brokers and speculators (at least some, anyway) may havebreathed a collective sigh of relief on Wednesday, as volatilityreturned to the New York Mercantile Exchange. The April contractfinally broke out of the tight $2.105-205 trading range that hadbeen containing its movements since March 6 by virtue of its 8.4cent rise to $2.239. Sources agreed the activity was led byanticipatory buying ahead of the release of the latest AGA storagereport. “It was more buy based on rumor today, but the rumor wasstrong enough to drive April above major resistance at $2.205,” oneof the sources told NGI.

The April Nymex contract took a 5.1 cent hit to $2.241 onTuesday, as speculators continued to sell positions following thespot month’s inability to break above the $2.355 resistance levelon Monday, a source told GPI. Total volume was estimated at 41,490contracts.