In sympathy with higher crude prices, and as another winter storm approached the Northeast, natural gas futures turned modestly higher in light pre-holiday trading Tuesday. Book squaring was the main feature in the abbreviated session. January closed 3 cents higher at $5.146.

Although mild weather is expected to usher in the New Year, cold temperatures and another round of snow showers were forecasts for Christmas Day across parts of the Mid-Atlantic and Northeast. In locations north and west of cities such as Boston, New York, Philadelphia, and Washington, the snow was expected to be deep enough to bury small elves.

With a 31-cent gain to average an even $6.00, Transco Zone 6 New York was the biggest cash price gainer Monday. And aside from a few Thursday-only deals, done Tuesday most business for the 25th and 26th had been taken care of Monday when traders transacted deals for gas to flow Dec. 24-26.

Without cash prices as a compass, natural gas futures traders were forced to turn again to the crude oil market for price clues. Though only gaining 22 cents to close at $31.97 Tuesday, February crude is trading at a new 22-month prompt month high. Traders agreed that the late upturn Tuesday in natural gas was in reaction to crude notching a new high for the second day in a row.

Looking ahead, traders see the market in a pivotal position prior to expiration Friday. In addition to the usual volatility that accompanies expiration day, traders will need to deal with the release of fresh storage data on Friday at 10:30 a.m. Despite being shocked by hefty withdrawals of 162 Bcf and 159 Bcf the last two weeks, market watchers are only calling for a 90-112 Bcf drawdown this week. However, versus last year’s paltry takeaway of 80 Bcf, a number of that magnitude would be bullish, if only to continue to boost the year-on-year deficit, which stands currently at -560 Bcf.

However, a double digit withdrawal may be all the ammunition bears need to make another push toward support in the $5.03-04 area. A break lower could prompt a quick move through psychological support at $5.00 as traders eye the bottom of the Dec. 11-12 chart gap down to $4.77.

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