After opening 3 cents above Thursday’s high trade, the newprompt month September moved higher in early trade Friday astechnical buying buoyed the contract near the confluence oftrendline and psychological resistance at $4.00. However, afterfailing to push through that level, traders were content to takeprofits ahead of the weekend. The July contract finished with justa 0.2-cent gain for the session at $3.845.

“Support held Wednesday and resistance held [Thursday].Something had to break [Friday],” said Ed Kennedy of Miami-basedPioneer Futures after witnessing the market shoot 14 cents higherin the first 30 minutes of trading.

Several sources contacted by NGI were surprised by the steadysell-off from Friday highs, looking instead for prices to linger inthe $3.90s. One possible explanation for the topsy-turvy tradingaction Friday was the release of contradictory weather forecastsfor the eastern half of the nation.

According to the National Weather Service, a large percentage ofthe Southeast, Mid-Atlantic, Northeast and Mississippi and OhioRiver Valleys is expected to see below normal temperatures continuethrough next weekend. And while that forecast is consistent withthe record-setting mild temperatures seen there throughout themonth of July, it is in sharp contrast to a respected privateforecaster.

According to Jim Rouiller of Pennsylvania-based Planalytics(formerly Omaha-based Strategic Weather Services), the low pressuretrough that has brought cool and dreary conditions to the East willbe supplanted by a high pressure system that is moving west fromits location in the North Atlantic Ocean. Commonly known as theBermuda High, this area of high pressure can dramatically affectthe weather in the eastern U.S. “You can expect heat indices toincrease pretty substantially across most eastern metropolitanareas by early next week. Air temperatures in the low 90s inconcert with higher relative humidity will increase daytime airconditioning load to well above normal,” he said.

And while a return of hazy, hot and humid weather in the Eastwould boost natural gas futures through its impact on the physicalgas and power markets, it may be academic come midweek if tropicalactivity picks up. “Right now we are looking at a couple ofdifferent models that suggest the conditions are conducive for theformation of a tropical disturbance to the east of Puerto Rico byWednesday or Thursday,” Rouiller continued. “But that is where thesimilarities of the models start and end, because one favors thedisturbance fizzling as it moves north into the cool Atlanticwaters, while the other calls for it to continue west.” It is thelatter scenario that would garner the attention of the natural gasindustry.

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