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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: JoeinIowa who wrote (22665)	12/6/2000 12:38:24 PM
From: JoeinIowa	Respond to of 29382

NY Natural Gas: Hits New High on Cool Forecasts, AGA Talk, Cash Dec. 6-MAR-- By Gloria Gonzalez, BridgeNews New York--Dec. 6--NYMEX Jan Henry Hub natural gas futures soared more than 17% at the opening of the regular session, scoring a new all-time spot month high of $8.800 in the process. Brokers attributed the rally to bullish speculation about the upcoming storage report, forecasts of cool weather and a strong cash market. At 0949 ET, Jan natgas was up $1.016 at $8.400 per MMBtu. * * * The New York Mercantile Exchange will allow front-month natural gas futures to rise as much as $1.50 per million British thermal units Wednesday before halting its open-outcry day session, a spokeswoman said. Prior limits had been 75 cents, but that level was breached in Access. The upside limit will now be $8.884 per MMBtu, and the downside limit will be Tuesday's settlement of $7.384, the exchange said. Brokers attributed Wednesday's record-setting rally to a combination of positive fundamentals. The cold weather in the Northeast and forecasts for more cool weather after the weekend were seen as the main proponent by some brokers who said the market remains very sensitive to the weather reports. "I just think the cold weather is the real push," one broker said. However, several brokers said growing expectations for a large withdrawal to be featured in Wednesday's American Gas Association storage report is also driving the rally. "AGAs gradually have turned more bullish," another broker said. The American Gas Association was expected to report that U.S. natural gas storage levels decreased by about 75 to 100 bcf with a number in that range seen as neutral, according to a BridgeNews survey of brokers and analysts conducted Tuesday. However, brokers said speculation this morning was that the draw would be closer to the 150-bcf mark. The AGA report will be released after 1400 ET Wednesday. Brokers noted that if the higher expectations hold true, it does not bode well for the market considering temperatures were relatively moderate in several parts of the country last week. If the industry withdraws 150 bcf during a week that was relatively mild, stronger withdrawals during colder weeks will shrink already tight storage levels and increase fears of a supply crunch during the rest of the winter. However, brokers noted that talk of a 150-bcf draw could be pure market speculation considering that the weather was mild several days last week. "I don't believe we'll end up with no gas, but they're buying as if we're going to have zero gas," said Guy Gleichmann, senior trader at FSG International. Meanwhile, natural gas for next day delivery at the Dec Henry Hub traded at about $8.87 to $8.93 compared to Tuesday's $8.02 to $8.12 range. Although the market has fallen off its opening highs with pressure coming from a slide in the crude oil market, observers say the path of least resistance continues to be higher. "You're in dangerous territory trying to pick a top," Gleichmann said. End Copyright 2000 Bridge Information Systems Inc. All rights reserved. The bridge.com ID for this story is BMSCNXK