Natural gas futures bulls continued to lick their wounds Friday as the March contract traded within its well-established recent range before closing at $4.452, down 3.3 cents from Thursday and 32.2 cents lower than the previous week’s finish.

After closing out the week ended Feb. 6 with front-month futures at a two-week high, the bulls looked as if they might be gaining control, especially after the March contract continued higher on Monday to close at $4.807. However, the changing of the guard was not to be as the contract dropped 26.4 cents on Tuesday and inched even lower through the final three days of the week.

“The natural gas market continues to wander within its recent trading range,” said Tim Evans, an analyst with Citi Futures Perspective in New York. “The 11- to 15-day temperature forecast looks supportive, but the market is also still trying to recover from last week’s conditions, which included both a smaller-than-expected 159 Bcf net withdrawal from storage for last week and some very mild temperatures that undercut heating demand.

“The market has to brace for a net withdrawal in next week’s report that could be 60 Bcf or so, and may not have interest in trying the upside until that data is under its belt,” he added.

The number revealed Thursday in the storage report for the week ended Feb. 13 will be compared to last year’s 157 Bcf pull and the five-year average draw of 155 Bcf.

Traders were still discussing the slightly bearish 159 Bcf draw reported on Thursday morning for the week ended Feb. 6. Some market experts noted that the reversal from Monday’s $4.880 high could be a sign of the bearishness to come.

“The implications will be very bearish if the presumed bear market correction from the $4.280 low cannot exceed the $5.240 level,” said Walter Zimmerman of United Energy. He explained further that the outlook was “extremely bearish” if the $4.280 to $4.880 advance was the entire bear market correction. “From a decisive close below $4.370 we still see the next two big steps to the downside as $3.520 and then the potential for the $1.965 area.”

From a more global, macroeconomic framework Zimmerman sees not only natural gas but the broader energy complex under price pressure. “The combination of U.S. dollar strength and stock market weakness has been like kryptonite to crude oil. We see no way that energy prices can launch into a sustained recovery higher while the U.S. dollar is in a continuing uptrend (i.e., deflation) and the stock market is in a continuing down trend (global economic contraction),” he said.

In the short term weather bulls may be back in the driver’s seat. MDA EarthSat in its six- to 10-day forecast said various weather models continue to show varied tracks for the upcoming storm on the East Coast, and one area of agreement is the post-storm cold snap for much of the Midwest, East and South. “Temperatures could be 10 to 15 degrees below normal across the East in the wake of the storm, bolstering heating demand,” said Matt Rogers, director. He added that some warmth is expected to move from the Rockies to the Plains at mid-period, and across the South later. The West remains chilly and stormy overall, helping to build snowpack in California, he said.

©Copyright 2009Intelligence 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.