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November 19, 2001

STRONG CASH, LACK OF OFFERS BUOY FUTURES . . .

 Natural gas futures surged higher in busy trading Monday on the New York Mercantile Exchange. Prices opened lower but staged a stunning 27 cent rally from their lows to score triple digit gains. Strength in the Midwest cash market, and trader apprehension of selling against impending cold weather kept the bulls in control. Short term traders see a broad trading range with prices currently near the top of that range. . .

 At the close of trading the December futures jumped $.154 to $2.791 per MMBtu, and the January added $.146 to $2.996 per MMBtu. . .

 In the cash market buying by Midwest utilities
kept Chicago city-gate prices surging. Prices finished in the $2.50 range up from Friday's close in the $1.90's. . .

 "There were very few offers and prices just kept moving on up. There were
stops above the market, and the cash market took off and that kept the futures moving higher," said Bill Highland, trader with E.D.&F. Man, New
York. . .

 "There is cold weather expected in the upper half of the United States;
that was part of today's rally, but I don't know how long it's going to last." . .

 "We're still hearing a build for this week on the AGA's, and that's got some
traders spooked. I'm expecting a range of $2.90 to $2.60 for the rest of the
year," he said. . .

 "I read the floor traders as being short. Even though we had this move higher today I think some traders actually went home short. I'm looking for
a slightly higher open tomorrow (depending on Access), but December would be
a sale anywhere from $2.83 to $2.87," he said.




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Bill Burson
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Englewood, Colorado 80110
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