Daily Market Commentary October 17, 2001

PRICES SWAN DIVE ON AGA REPORT . . .

 Natural gas futures plunged in busy inventory report driven trading Wednesday on the New York Mercantile Exchange. The AGA report showed an addiion of 63 BCF to working gas inventories, moderately above trader expectations. Nonetheless traders unloaded contracts in unison, and the deeply oversold condition of the market prompted traders to expect a higher open tomorrow. . .

 At the end of the day the November contract fell $.174 to $2.418 and the December tumbled $.149 to $2.703 . . .

 "Traders were looking for a build of 45 to 50 BCF, and some traders had
gotten long prior to the report so they liquidated quickly," said a New York
floor trader. . .

 "Both local and short term traders as well as trade and commercial accounts
were selling. The floor is now modestly negative," he said. . .

 "For tomorrow I think we'll have a slightly higher open, but close lower on
the day," he said.




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