After opening higher for the second day in a row, natural gas futures were left to chop lower as many traders elected to wait patiently on the sidelines ahead of fresh storage data from the American Gas Association. Trading picked up a little after the report was released (a 49 Bcf withdrawal), but even that was unable to propel the May contract outside of its recent trading range. By virtue of its $5.182 close, the prompt month for the second day in a row finished stronger on the day, but below its opening trade.

According to the AGA, a whopping 49 Bcf was pulled from underground storage facilities last week, bringing working gas levels to 19% full at 627 Bcf. While market watchers were prepared for a sizeable withdrawal based on heavy degree day heating tallies for last week, few expected Wednesday’s report to approachthe 50 Bcf level. Instead, most estimates ranged in the 20-40 Bcf area. Against historical figures, however, the withdrawal was even more bullish as the 49 Bcf dwarfed last year’s 5 Bcf pull as well as the five-year average of 14 Bcf. Storage is now a record-setting 39% or 404 Bcf less than year-ago levels.

As is usually the case, the price impact was instantaneous but short-lived as May futures spiked 17 cents in just five minutes only to tumble right back down to unchanged. For one Houston-based futures trader, however, the most conspicuous feature of trading yesterday was heavy buying late in the day by one or maybe two marketing companies who appeared intent on supporting May prices. “Most of the people that I talk to have been chewed up so badly by this choppy market that they aren’t trading it right now. There appear to be a few commercial traders pushing it around and the locals are following their lead and trying to skim a few pennies hereand there,” he said.

Above Wednesday’s $5.30 high, May has resistance at prior highs of $5.42 and $5.475. One the downside, support exists at the $5.00 area and then again at $4.92.

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