Here today; gone tomorrow was the prevailing mentality in thefutures arena yesterday when the coldest temperatures of the yearwere more than offset by forecasts calling for a warm-up by earlynext week. And as has been the case for most of the month, it wascash prices that not only led the way for the futures market, butalso notched a larger change on the day-where the January contracttrickled down, 2.2 cents to settle at $1.925, cash prices sank by adime on many pipes.

In addition to the lack of sustained cold, traders continued topoint to the hefty storage surplus, which has effectively cappedthe upside on this market. “This market is about one and a halfmonths behind on [storage] withdrawals and people would rather pullstorage gas, which has to come out anyway, than buy in the spotmarket,” a marketer lamented.

However, despite the idea that the market has been activelydrawing on storage reserves, most preliminary estimates call for anominal withdrawal in the 60-80 Bcf range in the American GasAssociation Storage Report released this afternoon. A withdrawal ofthat size would fall short of the 135 Bcf draw-down of a year ago,further ballooning the 654 Bcf year-on-year storage surplus.

In January technicals, The New York-based Pegasus EconometricGroup finds immediate support at $1.90-92, with “congestion from$1.88 down to the $1.79-815 lows of December 10-11.” Resistance isfirmly entrenched at $2.10-12, the group said.

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