While a significant portion of the industry was busy extending the Independence Day holiday, August natural gas futures on Thursday quietly worked downward yet again, recording a low of $6.560 before closing out the day at $6.618, down 13.6 cents from Tuesday’s close.

Following two consecutive sessions of closing lower by a penny or less, some traders wondered going into Thursday whether the bears’ convincing push lower was finally running out of steam. The day’s double-digit cent loss seemed to put those concerns to rest, at least for now.

“This market is really a yawner. There are definitely trader absences this week,” said Tom Saal, a broker with Commercial Brokerage Corp. in Miami. “We’ve noticed that a lot of traders took the days surrounding the fourth off, so people really aren’t paying attention here. August natural gas is trying to knock through the $6.550 area and it came close once again on Thursday. By dropping nearly 14 cents, I think it basically ensures that the bears are still in control for now. We haven’t seen much of a bounce, so I think the downside still has some room. I think we could head down to $6.310 or $6.320, but I think there will likely be some pretty good support down there. There was a lot of trading down in that area back in January.”

Commenting on the fresh storage news to be released Friday for the week ended June 29, Saal said he is surprised that so many people are calling for a build of only 75 to 80 Bcf. “If the 99 Bcf injection report in last week’s report for the week ended June 22 was accurate, I think the people that are looking for a smaller injection this time will be pretty surprised Friday,” said Saal. “I also think people are putting too much importance on what are arguably called ‘estimated’ storage numbers. However, the market does react to them, so we can’t ignore them.”

Jay Levine, a broker with enerjay LLC, said natural gas futures and crude futures read like A Tale of Two Cities, with crude being overbought and natural gas coming into oversold territory. “Crude charts are looking great — little in the way of resistance — but are once again in extremely overbought territory and are very likely extremely susceptible to a major reversal at any time (even if higher levels are still to come),” Levine said. “Natural gas, the opposite. Charts are in the toilet (sorry) and little in the way of support (weather-wise, to this point, and that could change — sentiment if nothing else — very quickly) with charts not quite as oversold as crude is overbought.”

Looking ahead, Levine said he sees August natural gas contract support at $6.610, $6.425, $6.250 and $6.075, with resistance up at $6.750, $7.245, $7.400, $7.550 and $7.950.

Taking a closer look at Friday’s storage report, the broker said the wide range of injection expectations seems to run from 69 Bcf to 94 Bcf, with most people looking in the mid-70 Bcf area. Levine said he is calling for a 69 Bcf build. A Reuters survey of 20 estimates expects an average injection of 80 Bcf. The number revealed Friday will also be compared to last year’s 72 Bcf build and the five-year average injection of 86 Bcf

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