Natural gas bulls never got a chance yesterday as traders shedlong positions in sympathy with falling cash market prices and inanticipation of warming temperatures this week. By the time thedust had cleared and the orders were tabulated, the March contracthad slipped a cool 18 cents lower, tumbling beneath several keylayers of support and easily negating last Friday’s impressivegains.

And whereas Friday’s advances were largely technical in nature,several traders were confident yesterday’s price action was basedpurely on fundamental factors. “Cash opened lower and the futuresmarket had very little choice but to follow,” insisted a Houstonrisk manager. “It is amazing what adding 10 degrees to your lows inHouston and Dallas will do for cash prices. Last week we wereseeing mid-30s and this week its mid- to upper 40s. Once cash hadmade up its mind, the futures market was just along for the ride,”he said.

However, the weather in Texas was only part of the storyyesterday. The snow-crusted Northeast U.S. also is expected to geta reprieve from sub-freezing temperatures later this week. In adramatic reversal of last week’s forecast, the National Weatherservice said above normal temperatures are expected for NewEngland, New York and New Jersey beginning this weekend. And whileabove-normal temperatures in those regions during the month ofFebruary will not prompt any backyard barbecues or neighborhoodpool parties, it will come as a relief to areas that saw heatingdegree days average almost 20% above- normal during the last twoweeks in January.

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