June natural gas is expected to open 5 cents higher Friday morning at $2.78 as the early arrival of an Atlantic storm may signal an active tropical weather season. Overnight oil markets rose. Traders see Thursday's price slide following a neutral storage report as indicative of market weakness.

"[T]he 76 Bcf injection was much in line with average industry ideas as well as last year's seasonal upswing," said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients Thursday. "But the longstanding deficit against five-year average levels narrowed further to only 67 Bcf, and we look for at least half of this shortfall to be further erased per next week's EIA report.

"We still expect a couple of triple-digit storage increases to flip the deficit to a surplus in the process of weighing further on nearby futures. We're still short term bearish-long term bullish." He added that although the market had failed to reach his sell objective of $2.90, he advises holding on to existing short positions.

"Although this market's selloff following the release of the EIA report was orderly, a 1.5% decline following a seemingly neutral supply figure is still a bearish portent. We are still not seeing much appetite for the short side of the market on the part of the large funds. But we also don't see much support off of the weather factor, nor do we see any technical indicators supportive of a long position."

Going forward, the supply dynamic is expected to change considerably. Tim Evans of Citi Futures Perspective sees triple-digit builds for the next three weeks, which take the current year-on-five-year deficit to a modest surplus by May 22.

Consensus seems to be that those builds are already baked into the market. "You'll see the market fall off 5 or 6 cents from a big number, then rebound and fall off again. We've been stuck in a range and I don't know if those numbers are going to make a big difference unless we close and stay below $2.50, which hasn't really happened," said a New York floor trader. "We are kind of in limbo right now."

It's only May and the hurricane season doesn't officially begin until June 1, but in an 8 a.m. EDT report the National Hurricane Center (NHC) reported subtropical storm Ana was meandering off the coast of South Carolina. It's position was stationary about 275 miles south southeast of Myrtle Beach, SC, and it was sporting winds of 45 mph.

NHC said the storm was expected to move more toward the north-northwest later today. A turn toward the northwest with a slight increase in forward speed is expected by the weekend. A tropical storm warning could be issued later Friday.

In overnight Globex trading June crude oil rose 71 cents to $59.65/bbl and June RBOB gasoline gained 2 cents to $2.0087/gal.