While Mondays have been a bear trader’s best friend, Wednesdays(last week’s Wednesday excepted) have given bulls a reason to smilelately and yesterday was no exception as prices moved higher in twodistinct buying binges.

After climbing steadily during the first hour of trading,natural gas futures erupted yesterday afternoon when traderslearned that the market was only able to inject 52 Bcf worth of gasinto storage last week. The September contract finished the sessionup 17.9 cents at $4.413.

Indicating the storage problem could plague the market past theSeptember contract’s tenure as prompt month, the out-months postedan equally impressive performance with October and the winter stripadvancing 18.1 and 14.5 cents respectively.

According to the American Gas Association, storage now stands at2,037 Bcf or 62% full. The 52 Bcf refill, while narrowly eclipsingthe 51 Bcf seen last year, paled in comparison to last year’sinjection and the five-year average, both of which were 65 Bcf.

“Locals are long and they are going to get even longer,” said abroker shortly after the report was released. He was right andwithin minutes the September contract had added a cool dime to itsearlier gains. However, upon further inspection, the storage figuremay be more bullish than it appeared at first glance. The AGAannounced that a reporting company has revealed a one-time upwardadjustment to the reported working gas in storage. That adjustmentaccounts for 10 Bcf of the growth in this week’s Producing Regionestimate. Without the one-time adjustment, the producing region’snet build would have approximated 2 Bcf and the total U.S. netbuild would have approximated 42 Bcf.

While unable to ascertain which week or weeks the understatedstorage figures were included in their survey, the AGA now believethe amount of gas in storage to be correctly represented.

You can look at this one of two ways and both are bullish, atrader said. Either you only injected 42 Bcf and got a 10 Bcf errorcorrection or you only injected 52 Bcf.

Looking ahead, he is bullish in the short-term on storage butfears that bulls might have a difficult time choking down theirThanksgiving Day meal if weather fails to materialize during thefirst three weeks in November. “That is when these storage concernswill really be tested. If some of the forecasts that call for arepeat of the last three winters are right, and we get another mildwinter, I would hate to be long from $4.50,” he reasoned.

In the short-term, however, he feels the market will likely tryto retest last week’s $4.565 high. “In order for this up-trend tocontinue, the market needs to make higher highs and higher lows,not lower highs and lower lows like it has been doing the lastcouple weeks.”

At first glance he looked to be right as the market continuedhigher in after-hours trading. After a down period from 4:10 pm to4:31 pm (EST), during which Nymex was experiencing technicaldifficulties, the September contract continued higher in Access andtraded as high as $4.435.

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