After ping-ponging between support at $6.875 and resistance at $7.19 for the previous seven trading days, May natural gas futures on Friday ended the week’s trading with an escape to the upside. Influenced by the strength in the petroleum complex, the natural gas prompt month peaked at $7.245 in afternoon trading before settling at $7.195, up 16.3 cents on the day and 19.8 cents higher for the week.

Despite the debate about how much of a relationship natural gas futures shares with the petroleum futures complex, some market experts pointed to June crude’s strength Friday as the impetus for natural gas’ rise. The June crude contract closed $1.19 higher at $55.39/bbl.

“Natural gas might be sympathizing a little with crude futures’ run-up Friday, which was sparked by demand increase reports from China,” a Washington, DC-based broker said. “I think the lead story is about worldwide demand and how it lifts the markets and I think natural gas went along for the ride. There was good buying across the entire complex.”

The broker noted that while natural gas futures haven’t really broken out of the recent range yet, the buy signal is definitely in. “All my stochastic programs showed that we had a correction down to the $6.90 or $6.88 level and now we have flipped this thing around and are ready to head back up,” she said. “All my buy signals have no signs of overbought in them. While the liquids look poised to hit the highs again, natural gas futures looks like they are lagging. I think there could be a chance for May natural gas to retry maybe the $7.40 level. However, the current prompt month doesn’t have much time.”

She noted that the last few days before a contract expires always add “interesting little wrinkles” to the trading, but overall, “the energies do look strong.”

Tim Evans of IFR Energy Services called Friday’s natural gas futures action “another stab at the upside.” He noted that the natural gas market closed the week on an upswing inspired by the performance of that “other gas market” and the way the market held key technical support on Thursday.

“The market has some more supportive short-term weather behind it too, as cooler temperatures across much of the northern U.S. [this] week will boost heating demand,” Evans said. “The larger picture for this market still remains bearish, however. Storage last week was 298 Bcf above its five-year average and the 80-90 Bcf we expect for [this] Thursday’s report would pad that cushion by another 30-40 Bcf. Even the cooler temperatures next week probably won’t take a comparable volume of gas away. We continue to believe that basing a natural gas long position on a view of crude oil performance is building a house on sand.”

The analyst noted that the upward reversal through Thursday’s $7.15 high for June futures has cleared Wednesday’s $7.28 high as well. As heir to the prompt month throne, June natural gas ended up peaking at $7.32 on Friday before settling at $7.269, up 15.9 cents on the day.

“This shifts the market away from the sideways consolidation of the past few sessions and into a more significant upward correction,” Evans added. “The Fibonacci retracement levels marked at $7.37, $7.49 and $7.61 represent potential targets for such an upswing and we note that each of these levels does match pretty nicely against the prior price action.”

The Energy Information Administration (EIA) reported last Thursday that a whopping 50 Bcf was injected into underground natural gas storage for the week ended April 15. However, due to anticipation of such a number, the report had already been factored into the natural gas futures price.

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