After checking lower in the moments following the news that 93 Bcf was injected into storage last week, the natural gas futures rebounded Wednesday as scale-down and technical buying propelled the market back above the $5.00 mark. At $5.05, the August contract closed 11.6 cents higher for the session, and just a few ticks below its $5.075 high on the day.

According to the Energy Information Administration, 93 Bcf was added to underground working gas stocks last week, bringing the total to 1,866 Bcf as of Friday, July 11. Because the refill fell in the middle of the common range of expectations centered on a 90-100 Bcf build, the storage report was open to interpretation. The market’s price action immediately following the report was evidence of this fact as traders propelled the August contract back up to $5.06 and then dumped it back down to $4.88 — all within five minutes. Since then, however, the market stabilized and gravitated back to the low $4.90s.

Storage levels are now 556 Bcf less than the same time last year and 300 Bcf below the five-year average of 2,166 Bcf. Last week, the market was pressed lower by the news that a whopping 111 Bcf was stuffed into the ground during the week ending July 4. Because this week’s report included the majority of the Fourth of July Holiday weekend — considered by many to be one of the lowest demand weekends of the year — some market watchers were looking for another triple-digit refill. But while the 93 Bcf figure fell short of that, it was significantly greater than the year-ago injection of 69 Bcf as well as the five-year average of 76 Bcf.

For storage to reach the 3,000 Bcf comfort level by Nov. 1, weekly storage injections must average 71 Bcf. In 2002, storage injections averaged 50 Bcf from this point through Nov. 1. In 2001, when storage levels were similar to where they are now, the weekly storage refill from the middle of July though the end of October was 70 Bcf.

Noting that last week was the 25th warmest week in the last nine years, Kyle Cooper of Citigroup was quick to anoint the storage report bearish. “Despite what were actually quite warm temperatures on a national basis, there was still ample gas for a build of 93 Bcf,” he wrote in a note to customers Thursday. Delving deeper into the storage numbers, Cooper estimates that if injections exceed the five-year average by 20% for the balance of the season, storage will peak at 2,961 Bcf. Injections thus far this season, he continued, have exceeded the five-year average by 25%.

“We’re one report closer to 3 Tcf,” chipped in Jay Levine of New Hampshire-based Advest Inc. Looking ahead, Levine was impressed by the market’s ability to rally off Wednesday’s lows. “[Thursday’s] close is one small sign a short-term bottom may be in place,” he wrote in a note to customers.

Also considering the technical side of the market is George Leide of Rafferty Technical Research in New York. Leide, who is now cautiously bearish following the market’s failure Wednesday at the crucial $5.00 level of support. “We were a buyer down to that level, but the market proved us wrong,” he lamented. Having liquidated his longs, Leide is now looking to the short side and expects the market to drop lower. “We could see $4.40, maybe not until September, but this market has sustained some damage and needs to move back above the $5.05 area in order to begin its repair.”

On the downside, Leide sees support at $4.67 ahead of $4.61.

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