The few traders still working on the day before the long Independence Day holiday weekend responded bullishly Thursday to news that only 85 Bcf had been injected into storage for the week ended June 27. The bullish number, teamed with concerns related to the development of Tropical Storm Bertha in the eastern Atlantic, helped August natural gas to a high of $13.587 before a regular session close of $13.577, up 18.8 cents from Wednesday and 37.9 cents higher than the previous week’s finish.

The industry appeared to be looking for an injection of 89-91 Bcf. After working lower prior to the report to trade at $13.345, August futures rebounded to hit $13.476 just minutes after the report’s 10:35 a.m. EDT release.

“The injection of 85 Bcf was below the 88-89 [Bcf] consensus and might therefore result in some support for prices, but it was really neutral compared with an 86 Bcf five-year average,” said Tim Evans, an analyst with Citi Futures Perspective.

“I guess the storage injection was a little bit smaller than the industry had been expecting,” said Tom Saal of Commercial Brokerage Corp. in Miami. “The market responded higher Thursday morning as a result.”

The broker said it appeared that some market participants had cut for the exits early to extend their holiday. “I don’t see a lot of heavy volume being thrown around out there, but business is getting done,” Saal said. “We could probably go a little bit higher here price-wise. With a number of disturbances down in the tropics in addition to Tropical Storm Bertha, I think we may be seeing some short-covering here ahead of the three-day weekend.”

Short-covering indeed. Traders were weary to leave themselves vulnerable going into the long weekend with the second named Atlantic storm forming on the radar. Bertha on Thursday was located 190 miles south-southwest of the Cape Verde Islands, traveling west-northwest at 14 mph with maximum sustained winds near 40 mph.

August crude also remained supportive, recording a new all-time record high of nearly $146/bbl before settling Thursday at $145.29/bbl, up $1.72 from Wednesday. Some traders continue to point the finger at crude for propping up natural gas futures prices.

“We still have a tremendous disparity between natural gas and crude oil,” said a Washington, DC-based broker. “The gap continues to get wider and wider. Looking at the same British thermal units that you would get if you bought a contract in crude or natural gas, it would cost you $114,000 less to do it in natural gas rather than crude oil. In November 2006 a contract of crude oil adjusted for Btus was worth $28,000 more than a contract of natural gas. The widening of that differential tells me that natural gas prices are still headed higher. You simply can’t dump the natural gas price so long as the crude price continues to soar.

“It is hard to think that we were trading gas at $9 back in March. At that point, everyone thought the price was going to collapse because of the onset of new production in the United States. Well, the industry was wrong. I think the general trend for natural gas will continue to be higher. We think we could get up around $14.600, which is kind of a ‘wow’ number at face value. However, we’ve said ‘wow’ all through this up move, so nothing is really surprising right now. We just don’t see any serious selling coming into this market.”

A Reuters survey of 20 industry players produced an injection range of 73-103 Bcf with an average expectation of 89 Bcf. Golden, CO-based Bentek Energy said its flow model indicated an injection of 91 Bcf. The actual 85 Bcf build split the difference between last year’s 84 Bcf build and the five-year average injection of 86 Bcf.

According to the Energy Information Administration, working gas in storage stood at 2,118 Bcf as of June 27. Stocks are 381 Bcf less than last year at this time and 57 Bcf below the five-year average of 2,175 Bcf. The East region injected 57 Bcf, and the Producing and West regions added 18 Bcf and 10 Bcf, respectively.

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