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November 27, 2001

JANUARY SEEN AT $2.25 . . .

 Natural gas futures posted a mixed close in active pre expiration trading Tuesday on the New York Mercantile Exchange. A lower opened prevailed for most of the session with the soon-to-expire December showing as much as a 16 cent loss for most of the day. A number of TAS (Trade At Settlement) orders were taken to the market at the close and sparked a seven cent improvement in December in the closing minutes. Traders are expecting neither a build or a draw for tomorow's AGA report which coincides with the expiration of the December futures. . . .
 At the close of trading the December futures fell $.090 to $2.606 per MMBtu, and the January rose $.016 to $2.951 per MMBtu. . .
 "I expect prices to trade in the range $2.50 to $2.70, and it looks to be an
exciting close. No one wants to sell January contracts just yet," said Bill
Highland, trader with E.D.&F. Man, New York. . .
 "Everyone is apprehensive about what kind of number we'll get on the AGA's.
Traders seem to think it will come in right around unchanged. It's strange for there has never been a year when the month of November has registered a
build in inventories," he said. . .
 "It's been so mild here in New York, I'm looking forward to playing golf
next week." . .
 "The month of December looks like it will be pretty slow. The last couple
of years it's been our slowest month with the 3 and 4 day weeks and early
closures." . .
 "All the traders I've talked to are looking for this market to crash. They
are saying January will trade down to $2.25. . .
 Other traders have a more positive focus. . .
 "I would like to see prices consolidate more before taking a long position,"
said a broker analyst with a prominent Oklahoma City futures and options
firm. . .
 "There hasn't been enough of a (technical) base built just yet. There is a lot of storage and demand has been slow. Until there are actual draws on
inventories, I can't see prices moving higher." . .
 "I think at least another week or so is necessary where prices don't make
new lows and move sideways. I expect a narrow trading range for the next
week or so. If we haven't made new lows a week from now I would feel pretty
good about buying natural gas," he said.







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Bill Burson
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Englewood, Colorado 80110
Tel (303) 761-7470 * Fax (303) 761-8662
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