After penetrating lower on Monday, August natural gas staged a rebound in Tuesday’s session, trading as high as $7.470 before settling at $7.425, up 14.1 cents on the day.

Despite continued heat in major natural gas usage regions around the country, the prompt month could get no lower than $7.255 on Tuesday after recording a $7.140 low just one day prior.

“We are clearly getting massive heat through populous regions of the country and the market has basically only come up and tested a downtrend line so far,” a Washington, DC-based broker said. “I think the pop on Monday was a fair amount of technical trading. We had that gap up from $7.200 from the first of July to $7.250 when we came back from the Fourth of July. That $7.25 area held up for quite some time. We tested it three or four times, but never broke through. On Monday, we did end up breaking through, but we had a substantial rally at the end of the day and ended up closing near the high.

“On Tuesday, I think a lot of people looked at Monday’s trade and said, ‘Hey, we sold off to a support number, but we rallied back through it. Why not go long here and put my stop at $7.18 or $7.15, because if it blows through there, then OK, I’m out. So I’m risking 15-20 cents to get long here and I’ve got upside up to maybe the $8 area…which is a great trade in terms of risk versus reward.'”

The broker said whether traders were right or wrong remains to be seen, but he noted that the heat has been around for a while and “we have been selling off in the face of it, all spurred I think by last week’s natural gas storage report, which showed a larger than expected injection.”

He added that Tuesday’s rally doesn’t yet get the natural gas futures market out of its recent downtrend. “We are close, but not quite there yet,” the broker said. “Obviously, the next couple of days with the petroleum and natural gas inventory reports will be important. We will be able to see whether the bearish natural gas storage report was an aberration or not. If it comes in with a subpar injection, then bulls might have something to key off of. However, if we have another middling week, then we know the last report wasn’t a fluke and that for some reason we are not using as much gas as we thought we would.”

If the storage report released Thursday morning — which covers injections for the week ended July 22 — comes out bearish again, the broker said $7.00 to $6.90 would be the first support area if there is a close below $7.20. If the report is bullish, he said the market could have the ability to rally back up into the $7.60 to $7.80 range.

Natural gas bulls will no doubt be tempering their goals as last week’s searing heat does not appear ready to dissipate later this week. Last week the Mid-Atlantic states of New York, New Jersey, and Pennsylvania racked up an impressive accumulation of 89 cooling degree days (CDD), 30 above normal. The industrialized states of Ohio, Indiana, Michigan, Illinois, and Wisconsin tallied an equally impressive 82 CDD, or 24 above normal.

This week the bulls do not appear to be so fortunate. The National Weather Service is forecasting only slightly above average cooling degree days across the Midwest and Mid-Atlantic. For the week ending July 30, the Midwest states above are expected to see 64 CDD, or six above normal. The industrialized states of New York, New Jersey, and Pennsylvania are forecast to endure 66 CDD, also a scant six more than normal.

Weather bulls can take some solace in that the high of 98 degrees forecast for Philadelphia Tuesday, which is only expected to moderate to 97 degrees Wednesday before dropping to 82 on Thursday, according to AccuWeather. The high of 86 Tuesday in Chicago is forecast to fall to 76 by Wednesday, the company said.

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