Market bulls were hoping for a repeat of last week’s market performance when a surprise 56 Bcf withdrawal figure from the Energy Information Administration (EIA) was about 10 Bcf greater than anticipated and April futures subsequently jumped 22 cents to close over $4 and begin the current trend higher. Bulls were not quite so lucky this week. The EIA reported a 6 Bcf withdrawal for the week ended March 18, which was right in line with traders’ expectations and prices slumped. At the close April futures were 9.1 cents lower at $4.244 and May dropped 8.5 cents to $4.327. May crude oil eased 15 cents to $105.60/bbl.

The Reuters poll of 27 analysts and traders hit the actual figure on the head. Prior to the release the poll showed an average 6 Bcf withdrawal, and others were close to the mark as well. IAF Advisors of Houston forecast a reduction of 8 Bcf and industry consultant Bentek Energy, utilizing its North American flow model, was expecting a pull of 9 Bcf.

Short term traders see some further weakness. “I think the market wants to go a little bit lower from here,” said a New York floor trader. “I think we will trade down to the $4.10 to $4.15 level over the next day or two. I think some of the large fund accounts that show up in the Commitments of Traders report are reloading on the short side,” he said.

Technical analysts versed in the vagaries of Elliott Wave and retracement analysis see the market continuing to make an erratic advance into May. According to Walter Zimmermann of United-ICAP, the recent gains that sent April futures to the mid $4.30s are “not too lean to be the first leg up of a pre-season rally. Call $3.73 to $4.40 the recent advance, and I suspect we are correcting that leg up and are not about to keel over and break below $3.73.

“From an intermediate term viewpoint we expect $3.73 to be broken later this year, but meanwhile I think it’s a little too early for this move up from $3.73 to be over.”

Zimmermann also makes use of bullish consensus data to derive his conclusions and the premise there is that major market bottoms are put in when bullish sentiment is lowest. The market has a tendency to advance off low bullish sentiment readings, 17% in particular. When natural gas rallied from $2.409 from a 17% bullish sentiment reading it took 18 weeks to complete the advance. Similar advances from 17% bullish sentiment readings occurred in the fall of last year when the market rose from $3.21 over the course of 13 weeks, and when the market recently traded at $3.73 earlier in the month, bullish sentiment was also at a miserly 17%. “We’re only a few weeks off the $3.73 low, and I’m thinking that it’s way too early for this move to be over,” he said.

Industry consultant Bentek Energy correctly forecast a build in the West Region. Prior to the release of the report Bentek expected a build of 2 Bcf in the West, and the actual figure came in at a 1 Bcf increase.

“This injection [West] is occurring at the same time as last year. SoCal is supporting this build in the region while a few facilities remain in withdrawal mode,” Bentek said in a report. The firm also calculated another injection in the Producing Region after last week’s small draw utilizing Texas data which showed a small draw of 0.8 Bcf during the week ended March 11 changing to an injection of 4.8 Bcf.

Bulls are looking to play a trump card in the form of an expected bout of cool weather in populous eastern energy markets. Forecaster WSI Corp. of Andover, MA in its six- to 10-day outlook said, “Below and normal temperatures are forecast over the Ohio Valley and northeastern U.S., [and] above and much above normal temperatures are expected to encompass the southwestern U.S. Anomalies between two to five degrees are anticipated in the coolest and warmer locations.”

In Japan concerns are focused on the quality of the food and drinking water. Despite government statements of radiation levels in drinking water being safe for infants, Tokyo residents snapped up bottled water. Work continues on the damaged reactors. Firefighters from Tokyo and Yokohama are preparing to spray another 500 tons of water toward that reactor’s nuclear spent fuel pool, which authorities said could happen Thursday or Friday, CNN reported. These pools contain fuel rods that, if not cooled down, can overheat and, in the process, release radioactive vapors into the air.

Coalition airstrikes in Libya were carried out Thursday near Tripoli, Misrata and Ajdabiya, according to a Pentagon spokesman. Negotiations continue to have NATO take over operations, CNN said.

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