With April natural gas futures trading within a slim 13.2-cent range on Friday before settling 4.5 cents lower on the day at $7.243, the market basically confirmed that it's waiting for summer weather and hurricane forecasts to glean its next hint on price direction. Despite the indecisiveness within the market, Friday's drop secured the streak of five consecutive days of lower settles as April shaved 56.3 cents off for the week.

"Low volatility in the natural gas market? Now there is a shock," said a Washington, DC-based broker, referring to Friday's slim trading range. "After dropping down to $7.10 on Thursday, we are now managing to hold here in the $7.20s. Maybe this little rally to a high of $7.375 on Friday is just a blip before they try to make another run at $7.100."

With freezing temperatures melting away across most of the country and Thursday's storage report for the week ended Feb. 23 revealing a well-below 200 Bcf withdrawal of 132 Bcf, the broker said the horns appear to be retracting as the claws come out. "Our models really turned from bullish to moderately bearish on Wednesday," he said. "Some people have $7.12 to $7.13 as support, but I think $7.05 is actually the number to watch initially. If we break that then we probably are looking at getting down in the range of $6.820."

Commenting on Friday's trading session, the broker noted that the trading range from $7 to $8 still appears to be intact. "We really have only made marginally lower lows and marginally lower highs, so it really looks like we are caught -- as often happens with this contract -- in the shoulder area with people deciding their views on summer temperatures and hurricanes. I have even heard the La Nina word bandied about here, but clearly the 200-plus Bcf storage withdrawals are finished for the season. But the massive draws did their job in removing the fear associated with plentiful storage putting downward pressure on summer prices. In the meantime, there is no real demand out there from the weather forecast, therefore we are moderately bearish. As of right now it is not too decisive one way or the other."

The term La Nina has indeed been mentioned, which has some concerned about what the 2007 hurricane season could bring. The National Oceanic and Atmospheric Administration said a La Nina episode may soon arrive, which could increase hurricane activity in the Atlantic Ocean (see Daily GPI, March 1).

While some market technicians saw a hint of bullishness in Thursday's price activity when the April contract rebounded off $7.10, it was not to be. United Energy's Walter Zimmerman noted that Thursday's market action found support at the same area that futures found support this time last month.

Natural gas bulls, however, have a long road ahead. "The bullish case for bottoming action now requires a decisive close above $7.700 as the 0.7862 retracement of this week's decline. Otherwise a further decline to the $6.880 area or lower would still be indicated," he suggested.

Weather bulls also have an uphill struggle. Prominent meteorologist Joe Bastardi of Accuweather is looking for a broad expanse of warmer temperatures to engulf much of the nation. "I am very bullish on the 10-day warm up I see coming, and I want folks to make sure they understand this is a warm-up that was supposed to be in full swing by the 10th of March," Bastardi said late Thursday on his web site.

The meteorologist acknowledges winter will deliver an early March blow to eastern locales, but the warm-up "will start on the plains on the 5th, reach the East Coast on the 10th, and while across the north ( north of Interstate 80) there will be give and take, I think people south of that from California to the Mid-Atlantic states will have 7-10 days of temperatures averaging 6-10 degrees above normal before the 20th."

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