With little in the way of fresh fundamental news and plenty of uncertainty ahead of Thursday’s storage report, natural gas futures traders played it close to their vests Tuesday. The July contract had a hard time mustering either a rally or a decline as it managed only an 11-cent trading range. It closed at $5.712, up 0.6 cents for the session. At just 62,296 contracts, estimated volume was light for the second day in a row.

Buoyed by stronger cash market prices, July futures were up early in the trading session and achieved their $5.77 high shortly after 10:30 a.m. EDT. After the initial bullish euphoria wore off, it was clear that cash prices were not setting a trend, but merely playing catch-up with the futures screen. NGI’s Henry Hub average was $5.66, up 22 cents for the day, but still five cents less than Tuesday’s $5.712 futures close.

Looking at the latest weather forecasts, both the cash and futures markets may have cause to continue higher Wednesday. According to the six- to 10-day forecast released Tuesday afternoon by the National Weather Service, above normal temperatures are expected over parts of the Southeast and Southwest as well as across the Northeast quadrant of the country. Although that does not represent widespread or dog-days-of-August heat and humidity, it might be a bullish improvement over the mild temperatures seen for much of the spring.

Also perking up are technical indicators, which suggest that the market may move higher for a period before dropping down to the $5.20 area. “The outlook for the next several days is for prices to move higher to partially retrace the decline from the June 6 high,” wrote Craig Coberly of GSC Energy in Atlanta. When this up phase completes (likely in the $5.94-6.08 area), the outlook is for gas to decline once again, probably down to the $5.20 area, he said.

Tom Saal of Commercial Brokerage Corp. agreed in principle and told clients to sell rallies against resistance at the $5.85 and $5.95 levels.

While technical factors may dictate price direction Wednesday, they will be almost non-existent Thursday when fresh storage data is released. Early expectations are centered on a build of 110-130 Bcf, well above the five-year average injection and last year’s refill of 80 and 81 Bcf respectively. Last week the Energy Information Administration said a record-breaking 125 Bcf was stuffed into the ground during the week ending June 6.

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