Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (22950)	5/23/2003 9:10:01 AM
From: Ed Ajootian	Respond to of 206321

HOUSTON (Dow Jones)--The New York Mercantile Exchange June natural gas futures contract fell Thursday as the federal government reported the largest total of gas sent to storage so far this season. The Energy Information Administration said 90 billion cubic feet of gas was added to storage last week, the largest injection so far this season. The EIA said total gas in storage is at 990 bcf for the week of May 16, about 35% below the five-year average of 1,520 bcf and 44% below last year's 1,720 bcf level for the same week. Storage in the producing area is down 45% from the five-year average and 37% below its five-year levels in the East. "We were prepared for some softening" after the impulse reaction to Federal Reserve Chairman Alan Greenspan's comment about supply shortage in natural gas, said Charlie Sanchez of Gelber & Associates in Houston. "When someone of such importance makes an observation, it's often already (over)," Sanchez said. Sanchez sees a possibility of the market's bouncing off its lows toward $6.15/MMBtu during Friday's abbreviated session, "but not much more than that." Major support is still seen at $5.70-$5.79/MMBtu and major resistance is at $6.54-$6.55/MMBtu, he said, the all-time high for the 12-month average and the all-time high for the June contract. The June contract Thursday fell as low as $5.95 per million British thermal units, but speculators and locals bounced it quickly back above $6.00/MMBtu. It failed to hold above $6.11/MMBtu, however, and some traders expect more selling ahead of the Memorial Day weekend. "The EIA report was a historically high number," said Kyle Cooper of Citigroup Inc. in Houston. "(June) needed a bullish report to sustain a drive higher, and it didn't get it." The Nymex will close at 1 p.m. Friday ahead of the long holiday. Physical gas traders will schedule gas through next Tuesday. The June contract expires next Wednesday. "Friday will be anybody's guess," said one veteran Houston trader, of the abbreviated session's price action. He predicts physical gas price dynamics to be neutral to supportive for futures pricing, with next month's physical price indexes above $6/MMBtu, a potentially negative bias. With moderate weather seen in the short-term, "You're seeing negative divergence and negative price action to come," he said. In the meantime, expected hot weather coming after the holiday weekend will then pit summer electric generation cooling needs against winter storage needs. Add to that concerns of another volatile hurricane season, and market concerns about gas prices escalate, said Guy Gleichman, a senior trader at U.S. Investment Group in Hollywood, Fla. On Thursday, June fell 16.3 cents or 3% to $6.035/MMBtu. July fell 15.4 cents to $6.143/MMBtu. Winter contracts fell 9.1 cents-9.9 cents to $6.378-$6.463/MMBtu. The 12-month average fell $6.003/MMBtu, down 10.5 cents. Estimated volume was around 75,000 contracts, with about one-third spreads, compared with total volume of 73,041 on Wednesday. June oil futures ended the session at $28.85/barrel, down 18 cents, a slight retracement after Wednesday's gains. Physical gas at the benchmark Henry Hub ended the morning session at $6.04/MMBtu, finishing inside a $5.99-$6.14/MMBtu range, down 3 cents-7 cents, almost $1/MMBtu above first-of-month gas index pricing for May. -By John Edmiston, Dow Jones Newswires; 713-547-9209; john.edmiston@dowjones.com