Both physical natural gas for Wednesday delivery and the soon-to-expire July futures contract had difficulty moving much off dead center in Tuesday’s trading as many in the industry appeared to be extending the upcoming Independence Day Holiday by a few extra days.

Gains in Appalachia, the Midcontinent, and Midwest were only slightly able to offset weakness in the Rockies and California, and the NGI National Spot Gas Average was flat at $2.67. July futures traded in a narrow range, but at the close eked out a gain of a penny to $3.037, and August added 1.5 cents to $3.064. August crude oil gained 86 cents to $44.24/bbl.

Futures traders are cautiously optimistic the market can hold above $3, but much will depend on the reaction to Thursday’s storage data. Current estimates are in the 55 Bcf range, below the five-year average. “The low held above $3 as well and that was a positive even though the range was only 5 cents,” said a New York floor trader. “If we come in with a smaller build, hold on to your knickers. We could see $3.10 in the spectrum of things.”

Others aren’t so sure higher prices are a given. “Seasonality is not on the bulls’ side,” said Walter Zimmermann, vice president at United ICAP. “There is considerable downside risk from a seasonal perspective, and I think it has the market a little intimidated. It has been a cool start to the summer, and the problem is when you start off that way, it needs to be an extra-intensity inferno later in the summer to make up for that.

“Here we sit waiting to see if we can take out $3.21, but I think if we take out last week’s low this market could really tumble.”

July opened a penny higher Tuesday morning at $3.04 as traders noted consistently warm temperature forecasts and a new technical paradigm.

Ritterbusch and Associates maintains that the dynamic of ever decreasing storage surpluses will provide market support along with bullish temperature outlooks. They contend it “is apt to limit price pullbacks while accentuating any additional bullish adjustments to the short term temperature views. Our previously expected resistance at the $3 mark per nearby futures now becomes support and we expect validation into tomorrow’s expiration of the July contract. July futures have slowly been gaining value against August in recent weeks with assistance from a firmer than expected physical trade that will likely lift back to above the $3 mark today.

“Following the demise of the July futures, we see the August contract edging on up toward the $3.20 area should the weather views maintain a bullish skew. The money managers have shifted back into a net short holding this month but will likely be covering shorts as chart resistance is violated. Nonetheless, we are reluctant to approach the long side of the market as we still see a test of last week’s lows as a possibility. But while we are maintaining a sideline stance, we also suggest holding long fall 17/short winter 18 bull spreads.”

In the physical market relatively quiet power pricing kept prices in the Marcellus shale and Northeast relatively in check. Intercontinental Exchange reported that on-peak Wednesday power at the Indiana Hub eased $1.06 to $27.00/MWh and peak power at the ISO New England’s Massachusetts Hub rose $2.43 to $25.11/MWh. Next-day power at the PJM West Terminal added $1.28 to $25.91/MWh.

Next-day gas at the Algonquin Citygate rose 13 cents to $2.30 and gas at Iroquois Waddington rose 28 cents to $2.50. Deliveries to Tennessee Zone 6 200 L changed hands 15 cents higher at $2.28.

Gas on Dominion South slipped a couple of pennies to $1.80 and packages on Tennessee Zone 4 Marcellus came in 4 cents higher at $1.71. Gas on Transco Leidy gained 4 cents to $1.68.

Other market points were narrowly mixed. Gas at the Chicago Citygate rose 5 cents to $2.83, and deliveries to the Henry Hub were flat at $2.98. Gas priced at the NGPL Midcontinent was also flat at $2.70.

Gas on El Paso Permian was quoted 4 cents lower at $2.63, and packages on Kern Delivery eased 3 cents to $2.74. Gas at the PG&E Citygate changed hands 2 cents lower at $3.18.

In its six- to 10-day morning outlook MDA Weather Services said, “The forecast carries similar themes as in the previous report, showing near normal temperatures overall for most of the Eastern Half. This, however, comes with uncertainty pertaining to the storm track through the Midwest, a factor in which models have shown volatility over the past 24 hours. The East sees heat from late in the one-to-five day period lingering into day six before moderating.

“Above normal temperatures are most steady in coverage from the Interior West to parts of Texas, with any risk in the Interior and Southwest being in the warmer direction per raw model consensus.”