Natural gas futures were caught in choppy trading action Thursday morning as bullish storage data met head on with the market’s seasonal propensity to move lower in the first quarter of the year. After an initial dip failed to attract much follow-through selling, buyers managed to support the market throughout the rest of the session. March finished at $6.162, up 2.8 cents for the day.

According to the Energy Information Administration, 203 Bcf of gas was pulled from underground storage facilities during the week ending Feb. 14. At 1,168 Bcf, stocks are now 868 Bcf less than the same time last year and 436 Bcf below the five-year average of 1,604 Bcf. Versus expectations centered on a 189-205 Bcf withdrawal, the 203 Bcf figure was supportive. It was very bullish when compared with last week’s 150 Bcf withdrawal, a year-ago takeaway of 124 Bcf and the five-year average withdrawal of 91 Bcf.

For Ronald Barone of UBS Warburg in New York, the 203 Bcf withdrawal was not surprising considering conditions last week that included roaring furnaces, a 2% increase in U.S. electric output (to 75,952 GWh from 74,257 GWh in the prior week) and a market that was espousing a “withdraw now/worry later” mentality. And although he sees a decline in heating load this week leading to a lower withdrawal figure next Thursday, Barone is quick to note that next week’s storage figure is likely to compare bullishly versus a 73 Bcf year-ago comparison.

Looking further ahead at year-ago weekly draws of 143 Bcf, 92 Bcf, and 92 Bcf, Barone predicts the year-on-year deficit — now at 868 Bcf — will increase to the 930-990 Bcf area by mid-March.

George Leide of New York-based Rafferty Technical Research said the market had a somewhat muted reaction to the storage number. “At 203 Bcf, the withdrawal was about 5 Bcf more than what we were calling for internally, and that kept the market from selling off too hard.” He said there was a contingent of traders waiting to take profits on their longs the moment the number was released. However, once they realized the bullishness of the number, they were less inclined to liquidate their longs.

Because the market is exhibiting such choppy trading behavior at these levels, Leide is careful not to place his stops too tightly. “The move higher has put us in a big vacuum with not much above us in the way of resistance until you get up to the $6.75 to $7.00 area. We look for a run to that level either by the March or April contracts. Only a break down below the $5.84-86 area would convince us that the market has turned.”

On the other side of the coin, Tim Evans of IFR Pegasus in New York believes the market is making one last hurrah before spring weather presses prices lower. “A growing [year-on-year storage deficit] is normally supportive at any time of the year, but we see the market as having limited further upside potential due to the lack of severe weather over the next week or two as well as the general seasonal warming trend,” he wrote in a note to customers Thursday.

In daily technicals, Evans pointed to Wednesday’s $6.085 low as a pivot point. “A break beneath that point would set the $6.22 high from [Thursday] morning as resistance, tending to also reinforce the general $6.20-25 opposition we have been anticipating.”

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