Following Tuesday’s 24-cent price decline, natural gas futures prices held Wednesday as traders assessed enough dribs and drabs of bullish news to prevent a test of last December’s market low at $4.69. After clawing back from an early push down to the $4.80 low, the August contract inched back to carve out a minuscule, 0.8-cent advance to $4.876. At 72,206, estimated volume was moderate for the session.

Sources polled by NGI Wednesday agreed that all the market needed was an excuse to rally. However, with weather forecasts mixed, little or no threat on the tropical storm front, and key supply data due out this morning hanging over their heads, traders were reluctant to cover their short positions. “Bulls were all dressed up with no place to go,” a cash trader noted. “This thing was lucky to get back into the [upper $4.80s].”

According to the latest six- to 10-day forecast released Wednesday by the National Weather Service, above-normal temperatures are expected to continue for the western half of the nation, while below-normal temperatures will set in across the east for the end of July and the beginning of August. That same western heat already has been felt on power demand. According to the Edison Electric Institute, there were 85,969 gigawatt-hours of electric generation in the continental United States last week — the sixth highest weekly tally on record.

Adding lost production due to Claudette to the high level of western gas demand last week, market watchers were heard re-calibrating their predictions for Thursday’s Energy Information Administration report. Kyle Cooper of Citigroup now feels that an injection in the top end of his 80-90 Bcf expected range would be “extraordinarily bearish.” Consensus estimates for the report call for an 80-85 Bcf injection, which would easily eclipse last year’s 64 Bcf as well as the five-year average of 68 Bcf.

Following the break of $4.83, Craig Coberly of GSC Energy in Atlanta now favors a move to the $4.40-50 area. “Gas declined below $4.83 [Tuesday], which invalidated ideas the trend has turned up. This keeps the bearish case in control. In the very short-term, this decline is likely to continue for a few more days,” he wrote in a note to clients Wednesday.

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