Boosted higher in part due to the record day of its liquid counterpart, August natural gas futures on Wednesday climbed 5.9 cents to expire at $6.048, while September futures jumped 12 cents to close at $6.142.

However, the big story of the day was in crude, which saw its September futures contract reach an all-time high of $43.05 due in part to trouble with Russian oil major Yukos. After notching the high, crude backed off slightly to close at $42.90, up $1.06. The new record eclipsed the previous bar set on June 1, when oil traded at $42.38 in the regular open outcry session.

“The run-up in the petroleum complex was more than just a technical run-up,” said Steve Blair of Rafferty Technical Research in New York. “Tuesday was our first indication that it might breakout to the upside and on Wednesday it did.” The analyst said one reason for the breakout was the Russian Yukos problem, where bailiffs ordered the company to halt sales. The other reason for the spike is the fact that funds have been pretty good buyers of the complex the last couple of days, he said.

“On the natural gas side, I think the uptick was mostly in sympathy with the petroleum complex,” Blair said. “I think we are getting to the point now where we are probably getting close to a downtrend line. I think natural gas was up today on a little bit technical and a little bit of sympathy.”

Blair said the other thing to keep in mind is the funds. “Over the last few weeks, the funds have continued to get short here, so if we breakout to the upside, I wouldn’t be surprised if you see a little bit of a spike…because of these guys maybe getting out of some of their short positions,” he said. “They are pretty short now.”

Looking to Thursday morning, Blair said he believes that the market will hold until the natural gas storage report comes out. “I would expect the market will remain firm,” he said. “I think it will stay above the $6 level, possibly falling down to the $6.02-6.03 mark.”

Tim Evans of IFR Energy Services said, “The tropical storm blowing through the natural gas pit today is one reported, not by the National Hurricane Center, but rather from a similar whirlwind of crude oil trading activity.” Evans said the crude sympathy caused an outside-reversal to the upside, compounding the volatility that the expiration of the August contract might of caused anyway. “While this has certainly sown confusion in terms of the short-term technical picture, we see the short-term fundamentals as still bearish.”

Looking to the Energy Information Administration’s (EIA) natural gas storage report Thursday morning, Evans said he is still expecting a 65-75 Bcf net injection. He added that with the cool temperatures across much of the United States this week, next week’s report might result in an even more bearish 75-85 Bcf build. “Compared with the five-year average injections of 59 and 53 Bcf, these will allow the 57 Bcf year-on-five-year surplus to sell to something closer to 90 Bcf.”

In addition to the 59 Bcf build five-year average, this week’s storage report for the week ended July 23 will also go up against the 81 Bcf build from the same week last year. The derivatives auction based on the EIA’s weekly natural gas storage report on Wednesday set the trading level for Thursday’s storage report at 70 Bcf, slightly lower than the pre-auction indicative prices level of 72.4038 Bcf.

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