With no signs of fresh bullish or bearish information, short-covering ahead of the weekend won the day Friday as May natural gas futures climbed for much of the regular session to close at $3.729, up 13 cents from Thursday and 11.9 cents higher than the previous week’s finish.

Traders and analysts agree that the market is currently range-bound, with no signs of a market-moving event anywhere to be found on the near-term horizon.

“Coming off a somewhat weak week, I think we saw a fairly good amount of short-covering coming into the market on Friday ahead of the weekend,” said Ed Kennedy, a broker with Hencorp Becstone Futures LC in Miami. “We have to face facts here, there is limited downside. Once we get down into the $3.50s, there is nothing but buying under the market from people who are going to be injecting gas into storage. As well they should because this is the best price they’ve seen for their storage gas in quite a few moons.”

Despite the strength Friday, Kennedy warned would-be bulls to cool their heels. “It is pretty hard to make a bullish case here other than the low price itself. I really think Friday was just a bunch of short-covering ahead of the weekend. The early summer weather outlook sure isn’t going to prop up prices. A number of the independent forecasters as well as the National Weather Service are calling for normal to below-normal temps this summer from Chicago to Boston and then down into the Southeast, so there is nothing to write home about there.”

Kennedy added that he believes the various hurricane forecasts are null and void to the market. “People think the market reacts to the hurricane forecasts, but it really shouldn’t. As always, it is not about how many hurricanes we get, it is about where they go….and forecasters just don’t have that type of accuracy on location yet.

“So while there is nothing to pin a bullish case on, the bearish case is well known. There is no lack of gas around and demand from the economy is down, but those are known items. Producers are cutting back production, but it could be some time until we see the ramifications of that. Nothing is going to move this market in one way or the other in the short term, except for technical factors here and there. I think we are going to be stuck range-trading for a while.”

Kennedy said his stance in this market is unchanged. He believes these prices are too good to let slip away. “Anybody who is an end-user should be locking in their price for whatever the appropriate percentage of their forward burn is for as far out as they can get it,” he told NGI. “Looking at the long-range charts, when was the last time you had a chance to protect prices this low? If you don’t do it, you’re an idiot. These are prices that end-users should be salivating over.”

Technical analysts using Elliot Wave methodology see the May contract poised to either confirm the end of the most recent downtrend or suggest continued weakness. A difference of just 21.6 cents separates the bullish and bearish cases. “The bullish model suggests $3.504 [Monday’s low] completed the decline off the $4.424 [March] high. The bearish model calls for slightly lower lows to complete the move down from $4.424,” said analysts at United Energy. If the bulls are going to confirm a short-term bottom, they need a decisive close above $3.756 (0.7862 of $3.746-3.534), but if the bears can take out $3.540, the next cluster of objectives resides between $3.451 and $3.395, the analysts said.

Others are watching crude oil. “It’s tough to say here, but there is some fear that if crude sells off down to $45 or $40, then natural gas could be down to $3 real quickly. I’m actually surprised that crude oil is this high, but if you go out on the curve, it’s saying that demand and prices will pick up,” said a Denver trader. May crude futures on Friday gained 35 cents to close at $50.33/bbl.

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