For the seventh Monday in a row, natural gas futures started the week on a strong note yesterday as traders were greeted back from the holiday weekend to inhospitable weather across the nation. Snow showers in the upper Midwest were giving traders one last taste of winter weather while a cold rain was falling across the Northeast. Meanwhile, rain, hail and strong thunderstorms were battering Houston Monday afternoon. Needless to say, it was not a good time to be a seller.

After gapping higher at the open, the May contract chopped mostly sideways to close at $5.516, up 13.5 cents for the session.

Several traders thought it a little funny that just one week after prices soared higher on hot weather in the Southeast, they were moving higher Monday in reaction to unseasonably cool temperatures across northern climes. “The market wants to go higher right now, [and] so people will turn anything they can and make it bullish. Last week it was the storage injection. This week it’s the weather,” a trader said.

According to the National Weather Service, cool temperatures this week are forecasted to increase degree day heating tallies for the April 15 – 21 period to 133% of normal and 137% of last year’s levels. And while the cool weather’s impact on storage injections will not be seen until next week, it was already being factored into trader’s psyche yesterday. Tom Driscoll of Lehman Brothers estimates that a 40 Bcf injection this Wednesday will be followed by a 10 Bcf injection release next week, just over half the 19 Bcf figure seen a year ago.

In daily technicals, May has support first at Monday’s low of $5.465. However, traders should look for a break of that level to lead to a quick move to the bottom of the chart gap down to $5.42. On the upside, resistance is seen at the April 10 high of $5.62.

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