Keeping May natural gas futures firmly centered around the psychological $7 figure, natural gas traders on Tuesday pushed the prompt month higher, only to be repelled by resistance at $7.09 for the second consecutive session.

After trading higher in the overnight Access trading session, May natural gas kept a $7 in front of it for the entire session, trading back and forth within a thin 9 cent range. The prompt month ended up finishing the quiet session at $7.045, up 9.5 cents from Monday.

The interesting thing about trading on Tuesday was that while natural gas was fairly tame, the petroleum futures complex soared. May crude settled $1.92 higher at $52.29/bbl, while May heating oil sprang up 5.07 cents to settle at $1.4930/gallon. May gasoline also jumped up to $1.5701/gallon, a 7.57 cent increase on the day.

“Even with the strength in crude, I would have to say once again that this natural gas rally is pretty anemic,” said Ed Kennedy of Commercial Brokerage Corp. in Miami.

Despite the $7.09 level offering resistance again on Tuesday, Kennedy said natural gas futures might have a little more strength left. “I think there might be a little more to this short-covering,” he said. “It may get up into the upper teens.”

With the prompt month swinging above and below the $7 mark the past few sessions, Kennedy said it is clear the market is currently consolidating. “Right now it is a neutral read…there is not much here,” he added. “However, I think they may try the resistance one more time. I think the bulls will have something to talk about for a couple days and then we will see what happens.”

Bullish traders looking for helpful weather conditions this week in the form of any lingering cool temperatures are likely to be disappointed if the forecasts of the National Weather Service (NWS) are correct. The NWS predicts well-below normal accumulations of heating degree days for the large gas markets of the Mid-Atlantic and industrial Midwest. For the week ending April 23, the NWS expects the Mid-Atlantic states of New York, New Jersey, and Pennsylvania to see only 65 HDD, 40 below normal and the highly industrialized states of Wisconsin, Illinois, Indiana, Michigan and Ohio should experience only 60 HDD, a stout 60 below normal.

If those forecasts are correct, the Mid-Atlantic and Midwest states will be well on their way to logging a very mild month of April. At those weekly HDD rates, the Mid-Atlantic will be far below its normal April of 496 HDD. The 60 HDD weekly sum for the Midwest is not even close to aggregating the 510 HDD normally accumulated in April, according to NWS figures. The monthly normals are based on a 1971-2000 average.

The below average accumulations of HDD are significant, for the industry already stands at a hefty working gas storage level of 1,293 Bcf, or 246 Bcf greater than this time last year and 269 Bcf more than the five-year average. Thus just to get to average working gas beginning inventories of approximately 3,100 Bcf, reductions of about 7 Bcf per week will be necessary to bring inventories into alignment with historical norms.

As for the sound of overworked air conditioners, Kennedy said it should still be quiet on that front in the near-term. “You’re going to have temperatures late this week into the weekend in the Great Lakes, New York and New England that are five to 10 degrees below normal,” he said. “I don’t want to make too much of the cool weather. It’s a slack demand period anyway.”

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.