After closing below the $5.00 mark last Thursday for the first time since early January, natural gas futures traded quickly sideways Friday as neither bull nor bear could muster the buying or selling required to budge the market.

The only excitement of the day occurred shortly after the opening bell, when short-covering proved not strong enough to lift prices back above the psychologically important $5.00 level. May finished at $4.943, up 2.4 cents, but nearly a nickel below its $4.99 high for the session.

Physical natural gas prices provided the futures market with little direction Friday as general flatness reigned. The notable exception was the Northeast, which shot higher on the weekend continuation of winter weather. Crude oil futures also failed to lead natural gas one way or the other as the May crude contract shuffled quietly lower in a fairly lackluster trading session.

With little else on traders’ radar, market talk this week will quickly turn to predictions over fresh storage data to be released by the Energy Information Administration Thursday. After digesting the news that a stunning 44 Bcf was injected into the ground during the cumulative two week period ending March 28, most market watchers calculate that a modest injection was again notched last week, despite the cool air in the Northeast at the beginning and end of the March 29 through April 4 survey period. Noting that a continuation of the recent string of relatively large injections (versus historical analogs) would be “quite bearish,” Kyle Cooper of Salomon Smith Barney in Houston estimates Thursday’s EIA report will feature a 10 Bcf refill.

And though it is an interesting exercise to predict the weekly storage injection figure, it will be some time until there is a really good sense for how quickly storage supplies are being replenished. Weather will be a key factor, but long-range temperature predictions for this summer are still a little shaky. Also of impact are hurricanes, which can cause supply shut-ins and greatly diminish the market’s ability to cap off its storage refills.

And according to renowned hurricane forecaster William Gray of Colorado State University, the 2003 hurricane season will be more active than normal with an above average probability of Atlantic basin tropical cyclones and U.S. hurricane landfall. In the extended range forecast released on Friday, Gray’s team of meteorologists predicted there would be eight hurricanes, three of them intense, and a total of 12 named storms this year.

Last year there were 12 named storms but only four hurricanes, and only two of those ever made it past category three intensity (winds 111-130 mph). Nevertheless, 2002 was an active year in the Gulf of Mexico with six named storms and significant disruption to natural gas and petroleum producing infrastructure and operations, mainly because of Tropical Storm Hanna and Hurricanes Isidore and Lili, the last of which made it to category four intensity (winds 131-155 mph) while it was moving through offshore Louisiana production facilities (see full story this issue).

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