With no support from crude or any other indicators on Friday, the Nymex May natural gas futures contract heading towards expiry found nowhere to go but down. After topping out at $5.610 and bottoming out at $5.555, the prompt month closed the day at $5.571, down 5.2 cents on the day.

The down day Friday put an end to a string of days that provided gains of 4.4, 2.9 and 4.1 cents from Tuesday through Thursday.

“Technically speaking, today was meaningless,” a Washington, DC-based trader said. He added that Friday’s action was what is considered an “inside day,” meaning the high and the low on the day were within the high and the low of the previous day. “It does not give you any clear indication of anything.”

Noting the down day on the liquid side (June Nymex crude futures dropped a quarter to settle at $36.46), the trader added that nat gas’ 5 cents down “doesn’t convince me that the modest uptick we have had the last couple of days is doomed. I don’t think the argument is written one way or the other. I would still be slightly biased toward the upside. On Monday if we really wash out again, then we will have to reassess.” He said it is possible that buyers are just getting comfortable with these prices.

Tim Evans of IFR Energy Services agreed that Friday was lackluster. “The natural gas market looks like a much sleepier version of the petroleum complex, with some trouble locating trading volume to back either Thursday’s rally or today’s decline,” he said. “While the 28 Bcf net injection to DOE natural gas storage for last week was more supportive than we expected, the shortfall relative to the 38 Bcf five-year average and the 60 Bcf build from a year ago was apparently not sufficient to bust the market loose to the upside.”

Evans said that the soft heating demand this week and a mixed outlook going forward failed to reinforce the support from the storage data, noting that it may be a few weeks before the threat from summer heat and hurricanes begins to offer longer-term backing.

“The $5.55-5.66 range from Thursday looks like the short-term pivot for May futures going forward, with a break of the support putting the $5.46 low from Tuesday and the $5.43 uptrend line shown at risk. The $5.34 low from May 24 and spot support at $5.29 and $5.06-5.10 could also come to play if the market extends its intermediate-term slide.”

On the other side, Evans warned that a move above $5.66 may push the market back toward the prior shelf of resistance at $5.78-5.801, with any move past that point taking aim at the $6.03 peak from April 12. “Once prices spike past that point, we see further gains to the $6.50-6.70 range before the market needs to consolidate and wait for the fundamentals to catch up. In the meantime, the market just seems more quiet than anything else,” he said.

Of news to market-watchers Friday, the EIA said it is looking to refine and improve the timeliness of natural gas production data through a new monthly survey (EIA-914) that will sample well operators (see related story). It is calling for comments on the proposed survey form. The EIA said its goal is to have releasable numbers 60 days after the close of a report month with a sampling error at the national level in the 1% range. The move comes in response to calls for improvement in production information from market participants, the financial community, the Bush administration and members of Congress.

The Washington, DC-based trader said the new survey would be welcomed. “Those are bigger macro pieces to the supply/demand puzzle,” he said. “Any tightening up of the data or the timing is always helpful.”

With the Energy Information Administration’s (EIA) 28 Bcf build announcement for the week ending April 16, working gas in storage now stands at 1,077 Bcf.. Stocks are 375 Bcf higher than last year at this time and 66 Bcf below the five-year average of 1,143 Bcf. The build didn’t have much of an impact Thursday as the industry consensus was for an injection of 20-30 Bcf.

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