By Christine Buurma Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Natural gas futures wavered Tuesday as traders weighed bargain buying against tepid demand, ample supplies and fears of economic instability. Natural gas for June delivery on the New York Mercantile Exchange was trading 1.7 cents lower, or 0.42%, at $4.00 a million British thermal units after opening less than a penny higher at $4.019/MMBtu. Bargain buying was providing some support for prices Tuesday as June options expired. Front-month gas futures were at their lowest point in more than two weeks, prompting some traders to buy back previously sold contracts to capitalize on low prices. As the June options contracts expire, "one can hardly imagine today's settlement to be anything except something near $4," with the July contract and physical gas for delivery at the benchmark Henry Hub in Louisiana trading only a few cents higher, wrote Drew Wozniak, an analyst with ICAP Energy in Louisville, in a note to clients Tuesday. But weak demand and abundant supplies continued to pressure gas prices lower. Mild weather and a glut of supply from onshore rock formations known as shales have led to high levels of gas in underground storage. Total gas in U.S. storage as of May 14 was 2.165 trillion cubic feet, about 17% above the five-year average and 3.5% last year's level. "Easing into summer, demand is still weak, and that's really the driving factor here," said Larry Young, senior portfolio manager with Covenant Trading in Chicago. Fears of global economic instability were also pressuring gas prices lower on Tuesday. Gas traders have been tracking economic data closely for signs of a recovery that would boost energy demand. The Dow Jones Industrial Average fell 242, or 2.4%, to 9825 shortly after the open Tuesday on concerns about a worldwide economic slowdown and tensions between North and South Korea. -By Christine Buurma, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com

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