Natural Gas Prices Settle Lower

Consensus Report: March 31, 2006

Natual Gas and Oil Report
By Spencer Jakab, The Wall Street Journal

Natural-Gas Prices Settle Lower --- Early Relief Rally Falters.

Natural-gas prices, which fell to a 15-month low before the Memorial Day
holiday, gained some traction from an early burst of heat yesterday but
gave it up near the end of the session.

"People think the market deserved a relief rally, but they didn't get it," said Allen Rather, an independent gas-market trading consultant in Victoria, Texas. July futures on the New York Mercantile Exchange, making their debut as the front-month contract, rallied as high as $6.36 before settling 3.1 cents lower at $6.123 a million British thermal units. More selling pressure may emerge unless early June is hot enough to spark fears of a surge in electricity-generation demand, traders said. Friday, gas prices ended at $5.925, a 15-month settlement low for the front-month contract. "It sets the stage to at least challenge a level under $6," said Guy Gleichmann, president of futures broker United Strategic Investors Group in Hollywood, Fla. "The market's not set to get off to the races unless we get a really discernible weather shift." Total gas in underground storage is nearly 50% higher than the five-year average, its highest level ever for this time of year, stoking fears among traders and analysts that a glut may appear by September if severe heat or damaging hurricanes don't intervene. There aren't many bullish factors, Mr. Rather said. Weekly storage data, normally a catalyst for price moves, are unlikely to be supportive amid preliminary predictions for inventories to increase more rapidly in June compared with 2005. Warmer-than-normal temperatures over much of the country and strongtechnical-price support near last week's lows, which came before the expiration of the cheaper June contract, would probably limit the downside in prices, Mr. Rather said. "People are not going to be as aggressive with selling" unless the weather pattern changes, he said. In other commodity markets: CRUDE OIL: Prices topped $72 with strong market activity following data indicating Chinese demand for oil is expected to increase while the international standoff about Iran's nuclear program continues. The July contract settled 66 cents higher at $72.03 a barrel on the Nymex.

SILVER: A sharp decline in the dollar lifted prices on the Comex division of the Nymex, but some late-day profit-taking kept the metal off session highs. July silver rose 34 cents to $13.07 an ounce after reaching a session high of $13.36 an ounce.

FUTURES AND OPTIONS TRADING INVOLVE RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE.

March 31, 2006

United Strategic Investors Group

Guy Gleichmann, President

1926 Hollywood Blvd Suite 311
Hollywood, Florida 33020

(800) 974 – 8744