Expectations often differ from what actually comes to fruitionin the volatile arena of natural gas futures, and yesterday thatpoint was driven home when a bullish combination of slow-to-resumesupply outages met with a smaller-than-expected storage refill.Traders chased the market higher most of the day, and advances inthe evening computer trading Access session nearly matched theregular pit-trading gains. The November contract received thelargest boost, rocketing 16.8 cents to post a final trade of $2.515last night after briefly settling at $2.433 earlier in the day.
The market wasted little time Wednesday morning setting the toneby gapping higher at the open as unconfirmed reports of moreserious supply disruptions filtered through the market. That,coupled with strong October cash pricing was enough to spawn freshbuying and short-covering activity that propelled the market higherinto the closing bell.
But the real news of the day came after the settle yesterday inthe form of the weekly AGA storage figure. Below most industryexpectations, the 41 Bcf injection was met met with follow-throughbuying when trading resumed last night.
A California marketer points to the market’s inability to postsignificant follow-through selling because of Hurricane Georges asa turning point. “Had the October contract had another day totrade, we probably could have seen $1.80, but November came in andwas able to resist the first wave of selling. Then it became aquestion of where do we go from here, and the answer was up.”
A Houston trader pointed to November’s ability to settle abovethe $2.43 level as significant. His next target basis-November isthe $2.65 level. “But, the market might need to pull-back before arun at that level,” he said.
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