Cash natural gas prices on average fell 4 cents for weekend and Monday deliveries in Friday’s trading. Gains were posted in the Midwest and Midcontinent as lingering cold was expected to keep temperatures below normal. Eastern and New England locations fell as forecasters predicted a warming trend. At the close of futures trading, April had risen 4.7 cents to $3.629 and May was up 4.6 cents to $3.673. April crude oil rose 39 cents to $91.95/bbl.

Midwest buyers said that although they had plenty of storage gas, they were still buying for the weekend and Monday. “It’s one of those crazy weekends with one warm day and two cold days,” said a Midwest utility buyer. “It seems like we’ve had quite a few of those this winter, and it has been quite a challenge. We had to pay about $3.62 on Northern.

“We are hopeful of getting all our storage gas out by the end of April, and I think we are on track to do that. We may have to pick up a bit in April on the spot market if it stays cool, but maybe April will warm up.”

Temperatures over the weekend and into Monday were expected to be below normal. Wunderground.com forecast that the high in Chicago Friday of 39 would rise to 43 by Saturday and slip to 36 by Monday. The normal high in Chicago is 44. Milwaukee, WI’s Friday high of 31 was predicted to rise to 41 Saturday but fall to 34 by Monday. The seasonal high for Milwaukee is 40.

The National Weather Service in Chicago said, “The area will quickly shift from winter to Spring weather this weekend with expected rainfall/snow melt with warming temperatures posing a flood threat…with thunderstorms not out of the question by Sunday. Ups and downs in temperatures are expected next week with a series of weaker systems bringing periodic low chances for precipitation.”

Quotes on Northern Natural Gas Ventura rose 5 cents to $3.62, and weekend and Monday deliveries to Demarcation gained 3 cents to $3.62. At Chicago Citygate gas came in at $3.70, up 3 cents, and on Alliance weekend and Monday gas was 5 cents higher at $3.71. Quotes on Michcon were seen 6 cents higher at $3.74.

At eastern points, prices retreated as temperatures were expected to undergo a warming trend. Alex Sosnowski, AccuWeather.com meteorologist, said, “A storm tracking from the Four Corners to the upper Great Lakes will drive warmer air over much of the eastern half of the nation spanning this weekend into early next week. A lack of arctic air and strong March sunshine will also work together to boost temperatures.

“Areas that will warm up the quickest will be those places which have little or no snow on the ground and that do not have a breeze off a large water body. Highs will soar into the upper 50s to mid-60s along the I-95 corridor, from Washington, DC, to New York City, late in the weekend and into early [this] week. Temperatures this high are more typical of the second week in April for these cities.”

Gas for delivery to New England points retreated. Quotes at the Algonquin Citygates fell $1.43 to $6.05, and deliveries to Iroquois Waddington fell 13 cents to $5.06. On Tennessee Zone 6 200 L weekend, and Monday gas tumbled $1.27 to $6.17.

On Tetco M-3 gas prices eased 6 cents to $3.73, and deliveries to Dominion fell 5 cents to $3.53. Gas destined for New York City on Transco Zone 6 skidded 19 cents to $3.75.

Futures traders were open to prices advancing beyond Friday’s close. “It seems you always get a small, little rally on Friday. I am thinking if they can spike this thing up on Monday, there is a chance of running up into the $3.70s, but the weather seems kind of warmer for the next 10 to 14 days. I think there will be a hard time rallying this thing much further,” said a New York floor trader.

Following the release of storage data Thursday morning, April futures traded as high as $3.603, and Jim Ritterbusch of Ritterbusch and Associates saw that figure as susceptible to further upward encroachment, but only by a little.

“While a bearish technical argument could be offered given the price halt in [Thursday’s] trade just short of Tuesday’s highs, we are viewing this resistance as vulnerable in [Friday’s] trade,” he said. “However, we won’t anticipate much upside follow-through on the achievement of fresh multi-week highs, and we are not expecting a close above $3.61.

“While the temperature factor still appears skewed bullish, coverage of below-normal temps within the six- to 15-day time views has been shrinking to about the eastern third of the nation. Furthermore, deviations from normal will be equating to much less of a consumption increase than was the case a month or two ago. But this month’s unexpectedly cold trends are still forcing a substantial expansion in the year over year supply deficit that is now approximating 360 Bcf and appears poised to stretch further.

“All factors considered, we still view this market as one that should be worked strictly from the short side. Any short positions established at around the $3.55 level or high per April futures should be held with stops above $3.61 on a close-only basis with a downside target to the $3.20 area.”

WSI Corp. in its morning six- to 10-day outlook said Friday’s “forecast is slightly cooler than [Thursday’s] forecast over the Northeast early in the period, whereas temperatures are warmer over the Southwest.”

Tom Saal, vice president at INTL FC Stone in Miami, in his work with Market Profile expected April futures to test Thursday’s value area at $3.550 to $3.596. On a weekly basis, Market Profile methodology identifies an initial balance, which is determined in the first two day’s trading. From there, it is anticipated that prices will break either higher or lower, and Saal has identified this week’s initial balance at $3.438 to $3.594. The first target to the upside is $3.672 and to the downside it is $3.360.

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