Coaxed higher by strength in the petroleum futures markets, the front-month natural gas contract on Wednesday capped its stay below $8 at only two days by recording a high of $8.127 during the regular session before closing at $8.077, up 10.1 cents from Tuesday’s finish. Despite the 18.9-cent two-day gain, some market watchers still see lower prices ahead.

Natural gas futures were supported by crude and heating oil, which both ventured higher Wednesday. September crude notched a high of $117.03/bbl before closing at $114.98/bbl, up 45 cents from Tuesday. September heating oil gained 3.98 cents to close at $3.1635/gallon.

“The natural gas market is turning higher in sympathy with the crude oil market, and also out of some worry that Tropical Storm Fay could conceivably curl back around into the Gulf of Mexico and regenerate in about the same spot that gave birth to Tropical Storm Edouard,” said Tim Evans, an analyst with Citi Futures Perspective in New York. “Otherwise, though, we think upward progress will continue to be limited by the above-average flow of storage injections, a trend that looks to have a few more weeks left to run.”

Frontier Weather said a scenario exists where Fay does loop around and enter the Gulf of Mexico. The forecasting firm said the storm is still expected to turn left along the Florida Panhandle and could come back over water over the Gulf of Mexico on Saturday.

Some within the energy industry saw trouble spots for the bears ahead of Wednesday’s session. Traders looked at the failure of September futures to breach a key support target as evidence that the pervasive bear trend may be coming to a close; $7.730 is a key retracement point identified by followers of Elliott Wave and retracement analysis, and so far it has held.

“The bullish news is that the $7.734 is so far holding (the 0.618 [retracement] of the $4.050 to $13.694 advance). The other bullish news is the time of year. Our rule of thumb in this regard is to not be short natgas after Labor Day weekend,” Walter Zimmerman of United Energy said Wednesday morning. He added that Tuesday was a higher volatility version of Monday. Both days failed to sell off and failed to rally. Both days gave neutral spinning top patterns on the daily candlestick. And both days showed bullish relative strength index divergence.

If natural gas bulls are ready to reassert themselves, it will be music to the ears of some traders. “Usually you can count on one significant heat wave or at least one hurricane in the Gulf to give the market a summer rally,” said Mike DeVooght of DEVO Capital, a trading and risk management firm in Colorado. He added that this year has produced neither of the two events and has been the “culprit driving the market lower.”

Turning attention to Thursday morning’s natural gas storage report for the week ended Aug. 15, Evans said he is calling for a 75 Bcf injection to be revealed when the Energy Information Administration reveals the data at 10:35 a.m. EDT. Golden CO-based Bentek Energy said its Flow Model is indicating an injection of 88 Bcf, bringing stocks 8.6% below the five-year high and 1% above the five-year average. The prediction includes a 62 Bcf injection in the East region, while the Producing and West regions add 20 Bcf and 6 Bcf, respectively.

The number revealed Thursday morning will be compared to last year’s 22 Bcf injection for the week and the five-year average build for the period of 56 Bcf.

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