May natural gas futures pushed 9.1 cents higher Wednesday to close at $7.689 as traders watched May options expire and awaited fresh storage news from the Energy Information Administration (EIA) Thursday morning. The June contract, which will take over prompt-month status in Globex electronic trading Thursday afternoon, closed 7.3 cents higher Wednesday at $7.781.

Although the physical relationship between the petroleum complex and natural gas is derived primarily from the substitutability of natural gas for heating oil in heating and industrial processes, current strength in the gasoline market is keeping crude oil and by extension natural gas prices firm.

Crude futures continued their string of violent swings as the June contract jumped back above $65/bbl with a $65.84/bbl close, up $1.26 from Tuesday. Highlighting the recent volatility, market spectators have received whiplash this week as the crude contract gained $1.78 on Monday before giving back $1.31 on Tuesday.

While some continue to monitor crude futures and the on-again, off-again relationship with natural gas futures, most eyes are now turning attention towards the EIA storage report Thursday morning for the week ended April 20, which most expect will mark a return to builds for the rest of the traditional injection season.

"While we expect Thursday's DOE storage number to be supportive compared with the five-year average, we note the bearish storage outlook going forward will once again make it difficult for the market to get much upside movement off the data," said Tim Evans, an analyst with Citigroup in New York. "Unless, that is, the funds are persuaded to fully cover their big short positions despite the weak near-term fundamentals."

Floor traders Tuesday observed a change of heart by fund accounts. "Funds have been pretty busy buying June, and they have changed their tune, for earlier they were sellers of the June," said a New York floor trader. He noted "waves of fund buying" in the June contract that looked to be independent of price.

Looking at Thursday's storage report, Evans said he was looking for the EIA to reveal a 30 Bcf injection. which would fall well short of the date-adjusted 77 Bcf net injection from last year and the 65 Bcf five-year average build.

A Reuters survey of 21 industry players produced estimates that ranged from a build of 32 Bcf to a draw of 8 Bcf with an average expectation of a 17 Bcf build, while the ICAP storage options auction produced a consensus build expectation of a 15.5 Bcf.

While noting that this report was especially hard to predict due to market circumstances, Golden, CO-based Bentek Energy said its Flow model projects an injection of 16 Bcf, bringing current stocks to 1,562 Bcf, which is 15.1% below the five-year high (last year) and 17.4% above the five-year average.

"The schizophrenic behavior of gas storage continued this week," Bentek said in its Weekly Storage Report. "Of the 59 total facilities in our sample, 28 had injections, 27 had withdrawals and four had no change. Including our estimate this week, the net change in stocks over the past six weeks has been an injection of only 46 Bcf. This is one of the most difficult scenarios for our flow model methodology, which relies on a statistical correlation of reporting facilities connected to interstate pipelines to the total universe of storage facilities."

Bentek's estimate for the week includes a 13 Bcf injection in the East region, a 6 Bcf injection in the West region and a 3 Bcf withdrawal in the Producing region.

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