One day ahead of expiration, April natural gas futures pushed higher on Wednesday, reaching a high of $9.650 before closing out the day at $9.572, up 15.3 cents from Tuesday’s finish. However, the gains in gas futures were overshadowed by May crude, which shot $4.68 higher on the day to close at $105.90/bbl.

Natural has futures traders continue to debate fair value for near-month gas, which over the course of five consecutive regular sessions earlier this month traded in a stunningly wide $1.585 range between $8.700 and $10.285. Adding in after-hours trading, that range is an even larger $1.630 between $8.664 and $10.294.

“It really looks like we are getting short-covering ahead of expiration,” said Ed Kennedy of Commercial Brokerage Corp. in Miami. “There is also a little bit of spillover from petroleum futures. We have no business trading with crude, but looking at the chart patterns, they really are moving in tandem. There are a lot of silly things currently going on in the financial world, and the lofty crude price is just one of them.”

On the weather front, Kennedy said it looks like temperatures are going to be colder than normal for the near term. It is also expected to be colder than previously forecast in the northern tier of states. “The chill could give the bulls renewed life, but only temporarily,” he said. “I think the $10.294 high is the top for this move. As for the shorts that are covering [Wednesday], I still expect that we’ll settle lower than the current price-point on April expiration on Thursday.”

Going into Wednesday’s session, traders were taking the revised weather picture into account and short-term traders were seeing market strength. “April tested and held $9.300; it rallied on the close, so it looks like it will hold,” said a New York floor trader. April natural gas futures settled Tuesday at $9.419, up 9 cents.

Weather bulls see the near-term outlook on their side. AccuWeather.com in its six- to 10-day forecast shows a broad section of the United States, including major energy markets, at below-normal temperatures. East of a sinuous line from northern Idaho to Kansas to East Texas is forecast to be below normal. South of a broad arc extending from Southern California to Utah to West Texas is expected to be above normal. All other sections of the country are forecast to be normal.

Turning attention to Thursday morning’s natural gas storage report for the week ended March 21, withdrawal estimates within the industry seemed to range from 32 Bcf to 57 Bcf. A Reuters survey of 21 industry players homed in on a 42 Bcf withdrawal, while Golden, CO-based Bentek Energy said its flow model is indicating a 32 Bcf pull, which would bring stocks 26.8% below the five-year high and 3% above the five-year average. Bentek said it expects the report to reveal that the East region removed 25 Bcf while the West and Producing regions withdrew 5 Bcf and 2 Bcf, respectively. The number revealed by the Energy Information Administration will be compared to the date-adjusted 11 Bcf withdrawal from the same week last year and the five-year average pull of 40 Bcf.

Going forward, Bentek said there is a good chance that natural gas in storage will end the withdrawal season below the five-year average.

“Using the five-year average withdrawals for the next two weeks, through the remainder of the traditional withdrawal season, stocks will remain 2.3% above the five-year average,” the research and analysis firm found. “However, the Bentek weather model indicates there will be an additional week of withdrawals past the traditional withdrawal season. If this forecast holds the projected increase in demand will bring season-ending stocks 7% below the five-year average.”

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