After resisting for nearly two trading sessions the promptcontract finally caved to selling pressure late Tuesday as localtraders liquidated the last of their positions. On that sour notethe October natural gas futures contract completed its tenure asprompt month yesterday by slipping 7.2 cents to $2.56. Estimatedvolume was robust as 122,906 contracts changed hands.

“Looks like we finally got convergence,” quipped a Gulf traderwho saw spot cash and prompt month futures prices fall in lineyesterday. NGI’s Henry Hub index for today is $2.53which coincideswith October futures $2.53 low yesterday.

But by midway through last night’s Access session it appeared tobe a little more than convergence because the November contract wasalready 6.5 cents below Tuesday’s close at $2.79. In doing so,November broke below its 20-day moving average at $2.80. But aChicago-area trader feels the real obstacle will be the 100-daymoving average at $2.70. “A move below that could really turn thisthing lower,” he said.

And Thompson Global Markets (TGM) agrees with his bearish tone,and believes the move lower suggests the recent buying pressure inthe winter months was more a rotation out of October than shortcovering or fresh buying. Furthermore, the group looks for a 75-85Bcf injection in today’s storage report to easily outpace lastyear’s 41 Bcf tally.

Support for November exists at last week’s $2.655 low, TGM said.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.