Fresh off their success in not allowing natural gas to dip below major support on Monday, natural gas bulls reared their horns yesterday as they prodded prices to a constructive opening print. However, further advances were hard to come by, leaving the market to check mostly sideways for the rest of the session. The August contract closed at $3.165, a hike of 9.7 cents on the day.

Looking back at Tuesday’s price action, several traders contacted by NGI were at a loss for answers. “We opened higher and then just sat there,” a Houston-based trader said. “There was nothing to send us in one direction or the other. Storage has already been priced into this market, the temperature outlook is unchanged and there is nothing on the tropical storm front.”

From a technical standpoint, the market was not much better. By opening at $3.15, the August contract just missed a gap higher open, which could have set up a possible island reversal pattern on the daily bar chart. August’s rally then sputtered at $3.195 and in doing so failed to fill in a chart gap up to $3.23 left by Monday’s lower open. The market slipped lower from that point, but sellers were unable to retest recent lows in the $3.00-05 area, settling instead for a $3.10 low on the day.

However, Wednesdays as of late have been the cure for the natural gas price doldrums and there is little to suggest that anything will be different today. The big question on traders’ minds is whether the American Gas Association will announce — for the seventh-straight week — a triple-digit storage injection. While 100+ injections have been few and far between in past years, they have been the rule this year as 10 of the 14 refills this season have surpassed the 100 Bcf level.

Kyle Cooper of Salomon Smith Barney gives even odds of seeing another triple digit injection this afternoon. “I expect the American Gas Association will announce a 95 to 105 Bcf refill…. That is lower than what we saw a week ago. The weather was a little warmer [last week] and there was no 4th of July holiday. Combined, that should account for 10 Bcf of extra demand. An injection figure in the 80s or low 90s could send the market higher in the short-term, but if we continue to put in that rate, the market will be forced beneath $3.00,” he said.

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