Repelled from last week's attempts to break through the $8 resistance area, June natural gas futures on Monday worked lower for a change, trading within a slim 13-cent range before settling at $7.779, down 15.9 cents from Friday's close.

Despite widespread fear that $4/gallon gasoline will likely be on tap by summer, energy futures as a unit moved lower on Monday. In addition to the drop in natural gas futures, June unleaded gasoline dropped 2.68 cents on the day to close at $2.1896/gallon, while June crude dropped 46 cents to finish at $61.47/bbl. The drop in gasoline was especially surprising results of a new survey published Monday showed that the price of gasoline at the pump has hit a record high, averaging $3.07/gallon for self-serve regular in the United States.

As for the next move in natural gas, one broker said nothing is for certain in the currently volatile market. Commenting on Friday's run-up to a high of $8.100, Jay Levine, a broker with enerjay LLC in Portland ME, said the market "needed" to make new highs before it could reverse. "This isn't to say that the top, short- or long-term, is in, or that this wasn't/isn't a fake out, but my confidence was high any reversal was [going to] come off new highs."

Even with the numerous refinery concerns, Levine said crude prices continue to drop. "The bloom is off of crude...now trading easily 10% lower than its post-Iranian/British sailor mess, but still bouncing off initial support (mine) at $61.15 (next stop, sub-$60) and natural gas taking it all in and not quite sure what to do, as it trades just this side of $7.80," he said. "It seems the rose is slowly coming off [the natural gas] bloom as well with the difference being crude et al. are closer to being oversold (still under some pressure) and natural gas is closer to being overbought, none of which is surprising considering the divergent markets we've had."

Looking at buy and sell lines, Levine said he believes support rests at $7.695, $7.405, $7.115, and then $6.750. On the upside, he is eyeing resistance at $7.875, $8.045, $8.505 and $9.000.

Going into Monday's session, it appeared that traders were digesting moderating weather and a market not ready to trade over $8.

Moderating weather in key eastern energy markets is thwarting bulls' hopes for higher prices. AccuWeather meteorologist Eric Wanenchak said southwesterly winds across the Northeast allowed warmer air to move into the region Monday, with high temperatures climbing into the upper 60s in Washington, DC, Philadelphia and New York. Farther inland, highs were in the 70s from Chicago to Buffalo. "Tuesday will be an even warmer day for the major cities in the Northeast as warmer temperatures continue to get pulled in from the Southwest," he said. "High temperatures will reach the upper 70s to low 80s in many locations under partly to mostly sunny skies."

Longer term, AccuWeather sees above-normal temperatures. In its six- to 10-day outlook above-normal temperatures are forecast for almost the entire United States. North and east of a broad arc extending from northern Minnesota to central Michigan to New Jersey is expected to receive normal temperatures, as well as portions of the Pacific Northwest. The remainder of the country is predicted to enjoy above-normal temperatures, the forecaster said.

Risk managers suggest selling rallies. Mike DeVooght, president of DEVO Capital Management, noted that last week's volatile trading "essentially covered the last few weeks' range in one day. But after the $8 level (a good sell level in our opinion) failed to generate any buying interest, natural gas prices quickly pulled back."

He added that this type of two-sided volatile trade is often the case at this time of the year before the heat and hurricane season kick off in a few weeks, noting that market direction will be determined when heat and hurricanes actually take center stage. "On a trading basis we still would be shorting the market on rallies approaching $8 on the spot market if not done so already," he said.

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