Scared off by the $6 psychological mark yet again, the natural gas futures prompt month tucked tail Friday as the June contract notched its second consecutive down day. After penetrating the $6 level in trading Wednesday, the June contract followed up its Thursday drop of 4.2 cents with a 6.2-cent loss on Friday to close at $5.862. The prompt month traded in the $5.850-5.970 range on light volume, with 48,826 contracts changing hands.

“After the big run-up on Monday, we’ve just been marking time over the past few days,” a Washington, DC-based trader said. Citing Friday’s close on the lower end of the day’s range, the trader said there is a little bit of a potential bias to break to the downside.

“I am not ready to call that yet, but even if we did, it would probably be putting us in the $5.75 range,” he said. “Technically speaking from the charts, the market is indecisive, it hasn’t given us a read on it yet. It has not made a new low, so I am not willing to be too bearish yet. If we penetrate $5.75 on the downside, I would become more bearish, but not until then.”

Craig Coberly of GSC Energy said that trading below $5.75 would most likely be “too much” for the consolidation he envisions. “If gas declines below this level, it will be likely a more bearish situation has developed and the outlook for an immediate move into the $6.20-plus area will be invalidated.” He noted that long-term support resides at $5.66-5.68.

Tim Evans of IFR Energy Services pointed out that the gas market has “opted for quiet consolidation mode on light book squaring ahead of the weekend, leaving a commitment to a trending move for next week’s trade.

“Over the past four sessions, the market is working on either a bull flag continuation pattern or an interim top, and it will take a move outside the $5.825-6.01 range in order to confirm which. On the downside, a break would target failed resistance at $5.74 as possible support, with more buying seen through the prior lows from $5.63 down through the $5.544 floor of April 20.”

Evans also noted that uptrend support at $5.51 and the $5.44 lows from March might also limit the downside for June. Classifying the $6.01 high from Wednesday as the recent high-water mark, he said he sees some residual selling in conjunction with the $6.03 spot high from April 12. “If this barrier is breached, we see the $6.11 June high from that date as vulnerable to a test.”

The Energy Information Administration’s Thursday storage report for the week ended April 23 revealed a slightly bearish 78 Bcf injection. The build came in almost right in the middle of Citigroup analyst Kyle Cooper’s estimated range of 74-84 Bcf. However, the number came in near the top side of Evans’ prediction of a 60-80 Bcf build, and slightly outpaced the industry consensus of a 71-77 Bcf build. Despite almost spot-on predictions, many market-watchers found the report to be bearish when compared to the 46 Bcf five-year average build for the week as well as the 52 Bcf net injection from a year ago.

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