The futures market gave the impression it was heading higheryesterday when February opened at Tuesday’s high and quickly tradedto $1.85. But the selling dried up, leaving the market vulnerableto light selling for the rest of the session. The February contractclosed down 5.1 cents for the day at $1.77.
No fresh news was seen during the regular trading session, whichprompted traders to suggest the market’s weakness was partiallycaused by cash prices that backed off their highs in late-morningtrading.
But fundamental reasons were not alone in yesterday’s priceslide. A source said sell stops at $1.78 ushered the prompt monthdown to its $1.74 low.
Sources also said trading was relatively quiet yesterday aheadof the American Gas Association (AGA) Storage report released lastnight. For the week ending Jan. 13, the AGA estimated a totalwithdrawal of 233 Bcf,leaving 2,412 left in underground storagefacilities. But despite the stark contrast with the 43 Bcfwithdrawal seen last year, Ed Kennedy of Miami-based PioneerFutures feels this week’s report was “smack dab in the middle ofmarket expectations.
“However, now that the storage report is out of the way itallows traders to focus their attention on the forecasts callingfor warmer than normal temperatures into this weekend. I look forcash prices to lead futures lower probably as early as [Thursday],”he reasoned.
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