Once again hitching their wagon to crude oil futures, April natural gas futures on Wednesday probed lower, reaching a session low of $7.09 before settling at $7.138, down 11 cents on the day. While the decline was significant, it failed to test $7.05, which is considered to be the lower boundary of the market’s current trading range.

May crude recorded a second consecutive day of big declines, settling $2.22 lower at $53.81/bbl. April heating oil only settled 1.3 cents lower at $1.5336/gallon.

“We pretty much followed crude on Wednesday” a Washington, DC-based broker said. “However, the percentage drop in crude was much larger than the percentage drop in natural gas. When crude futures drop $3.65 in two days and natural only reaches the bottom of its little upper range, I think that shows you that we are in a strong natural gas bullish market.”

The broker noted that April natural gas got down and touched the 10-day moving average, settling almost right on it. “Previously when we have done this, a rally follows,” he said. “I am not saying that we are going to do what we have done before, but I would say natural is in no way, shape or form breaking down. Any sort of breakdown would have to get through that $7.05-7.00 band first for me to even get modestly worried about it.”

Looking towards Thursday’s release of the Energy Information Administration’s (EIA) natural gas storage report for the week ended March 18, a number of market experts believe that this could be the last sizeable storage withdrawal of the season.

“We think we are going to see another bullish inventory report,” the Washington, DC-based broker said, noting that while he has heard calls for a withdrawal as big as 118 Bcf, he is looking for a 98-105 Bcf pull. The five-year average withdrawal is 51 Bcf and last year’s pull was 62 Bcf.

The ICAP-Nymex storage auction from 3 to 4 p.m. (EST) Wednesday — which allows people to hedge their exposure to the storage report — revealed an implied market forecast of a 95.2 Bcf withdrawal.

Others are factoring in a slightly lower withdrawal. “We are anticipating a decline of 90 Bcf, while the range of industry ideas is for a drop of between 65 and 110 Bcf,” said Jim Ritterbusch of Ritterbusch and Associates.

Kyle Cooper of Citigroup said that while the industry consensus is for a 91-96 Bcf withdrawal, he is looking for a pull between 86 Bcf and 96 Bcf.

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