March natural gas futures inched higher in uninspired trading Friday on the New York Mercantile Exchange. Short-term traders see the market still vulnerable to continued price erosion, but those with a longer-term perspective see now-average supply levels keeping any further market deterioration in check.

At the close March futures rose 0.4 cent to $4.323 and April added 0.4 cent as well to $4.340. March crude oil rocketed higher $3.70 to $89.34/bbl.

Even though natural gas futures finished with a slight gain, one trader did not get the impression that there was much market interest in pursuing the long side. "I didn't feel that there was any significant buying today, and everything I've seen leads me to believe that there is not anybody interested in buying," said a New York floor trader.

"There is just too much fundamental bad news out there to interest anyone in buying; I think we have just run out of selling for the end of the week. The first day after expiration is generally a quiet day, and the volumes are down. I have to think this is just a resting period and everything I have heard says the market is still going lower."

The trader didn't have any definitive ideas of how much lower the market might move. "From what I have been seeing, the fundamental side is all about how much [gas] is out there and how much it is weighing on the market. I haven't heard of anyone talking a $4 support. You could probably go back to long-term chart points and maybe $3.75 would be support, but that would be based on technicals and not anything else."

In the trader's view there was no reason for $3.75 or any other number to hold. "It would take extreme cold weather at this point for we have already had a bunch and more is predicted for the next couple of weeks, and that doesn't seem to be helping support the market at all.

"I would have thought the market would have held above $4.50, but we got up to $4.87 [overnight] Monday, but it has vaporized since then. I don't see a floor and I don't see a reason to buy it at this point," the trader said.

The trader may just get his extreme weather. According to AccuWeather.com, "The latest indications continue to point toward a large storm forming amidst a building temperature contrast over the middle of the nation. Precipitation and strong cold air/warm air circulation around that storm will affect many millions of people from the interior West to the Atlantic Coast as next week progresses."

AccuWeather.com is calling it "the Groundhog Day storm," and it will likely severely impact ground travel and lead to canceled flights, school delays and closures. The storm is not only a concern for Wednesday but for much of the week as the system moves along."

In spite of the New York trader's admonitions, others aren't convinced that the market is going to continue lower. "While conceding to market dynamics that are capable of shifting at any time, we also feel that the return to average supply levels is worthy of a neutral check mark regarding near-term price direction as opposed to the bearish designation that applied to this market through the fourth quarter of last year," said Jim Ritterbusch of Ritterbusch and Associates. Not withstanding last "week's ugly pricing performance with values sliding some 55 cents off of highs established at the start of [the] week, we don't anticipate much downside price follow-through from here and would expect some price gravitation back up toward the $4.50 area next week within the newly spot March contract," he said in a Friday morning note to clients.

Traders looking for more fundamental factors pertaining to natural gas demand and prices were somewhat disappointed with the Friday release of gross domestic product (GDP) data by the Commerce Department. Analysts were expecting Q4 GDP to have risen 3.5% at an annual rate, up smartly from Q3 GDP growth of 2.6%. The actual figure came in at a somewhat softer 3.2%.

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