As temperatures soared to the 90 degree mark across much of the Southeast U.S. and ahead of another potentially bullish storage report to be released Wednesday, natural gas traders pressed prices higher Monday, setting the stage for a possible retest of recent highs. After gapping higher on the open, the May contract shuffled mostly sideways yesterday as traders debated whether the American Gas Association would announce another withdrawal or the first injection of the season. The prompt month finished 8.9 cents higher at $5.477, its highest close since the last week of March.

While April is just about as pure a shoulder month as there is in natural gas, with very little in the way of either heating or cooling demand, that was not the case Monday as traders pointed to weather — both outside their windows and in their forecasts — as a contributing factor to the price rise.

According to the latest six- to 10-day forecast released yesterday by the National Weather Service, below-normal temperatures are expected across roughly the northern third of the nation next week, raising the probability of heating demand. Meanwhile, above-normal temperatures are predicted across much of the South, leaving open the potential for continued gas-fired electricity generation for cooling demand. And those air-conditioners were certainly cranking Monday, when temperatures approached the 90 degree mark across much of the Southeast U.S., led by the nation’s capital, which at 88 degrees was just one degree short of a more than 40-year record.

Also of impact Monday was speculation ahead of Wednesday’s storage report. Most market-watchers and traders last week believed that the withdrawal season was over and that the market could expect its first injection figure. Now however, analysts are divided on the issue.

Historically, last week is typically the beginning of the injection season, as the last four years will attest. But on closer inspection of degree-day data, one will note that the nationaveraged 98 degree days last week, 6.5% more than originally forecast and 14% colder than last year. It deserves mention here that last year saw the smallest injection (2 Bcf) for this week since 53 Bcf was withdrawn in 1996.

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