Bullied by revised intermediate-term weather outlooks and feeding off a delayed reaction to supportive storage data issued Thursday, natural gas futures finished the week on a positive note as prices rallied to new two-week highs Friday.

The December contract received the biggest buying boost, rising 11.2 cents to close at $3.981. At 70,734, estimated volume was light, serving to undercut the advance.

Over the past month, storage and weather have taken turns as the market’s bullish catalyst. While weather was solidly supportive through late October, storage was bearish. Then, as storage turned bullish over the last couple of weeks, the weather has moderated. However, with revised forecasts handed down from the National Weather Service, storage and weather were in bullish agreement Friday.

According to the latest six- to 10-day forecast by the NWS, below-normal temperatures are expected across much of the populous Southeastern and Mid-Atlantic areas of the country for the Nov. 21-25 period. Meanwhile, normal temperatures are expected to return to Texas, Oklahoma, Arkansas, Louisiana, the Appalachian region and the Northeast. And although above normal temperatures are expected across the western half of the country, that constitutes a smaller area than had been previously expected to see above normal mercury readings.

However, the weather was not the only story Friday. Also of impact, traders agreed, was a delayed reaction to supportive storage news released Thursday. According to the Energy Information Administration, storage decreased by a whopping 48 Bcf during the week ending Nov. 8, leaving stocks at 3,097 Bcf.

Heading into the report, expectations had called for a withdrawal of 5-60 Bcf, with the common range of predictions clustered in the 20-30 Bcf area. A week ago, the EIA reported a 27 Bcf withdrawal for the week ending Nov. 1, which also compared bullishly against expectations clustered between a 10 Bcf injection and a 35 Bcf withdrawal. Because last year’s comparable figure was a 35 Bcf injection, the year-on-year deficit widened by 83 Bcf to 90 Bcf.

But after rallying on that supportive supply news Thursday morning, the market could not hold the gains. That had cast the market in a decidedly negative light heading into Friday’s session. Now, however, the market’s outlook is mixed. With Friday’s $3.981 settle, the market broke a string of three down bars on the weekly chart. A fourth straight down bar would have put bears solidly in the driver’s seat, chartists agree.

Looking ahead, however, there aren’t too many that are willing to bet too heavily on the upside. “Even with [Friday’s] rally we remain solidly in the recent range and we continue to urge our clients to sell as close as they can to the $4.00 level and buy as close as they can to the $3.75 level,” said Peter Hattersley of New York-based Rafferty Technical Research. “We have been using $3.88 as our pivot point to rotate out of positions…Only a move above $4.07 or below $3.63 would signal that we have broken out of the trading range,” he reasoned.

Another development that traders will want to keep an eye on this week is the progress of the U.N. weapons inspectors in Iraq. Although inspections are not set to resume until Nov. 27, chief weapons inspector Hans Blix is set to arrive in Baghdad Monday.

“Providing they accept their visas and let [U.N. weapons inspectors] into the country, each day leading up to the inspection date will put increasing downward pressure on oil prices,” a Washington, DC-based broker said. “Crude and natural gas have shown very good correlation lately and that, coupled with the tendency for natural gas prices to move lower in December, could be more than this market can handle” she added.

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