After warding off the March contract in its last week of trading, psychological support at $4 proved to be a similar Achilles heel for April futures bears on Friday. The contract traded below that price level for most of the morning before rallying in the afternoon to close at $4.198, up 12.1 cents from Thursday and 16.2 cents higher than the previous week’s finish.

After breaking below $4 just prior to Friday’s regular trading session, the April contract put in a low of $3.916 and remained under $4 until just before noon EST, when the contract rallied hard. Prompt-month futures recorded a high of $4.296 close to 1:30 p.m. EST before trickling lower to close.

“I’m a little surprised that $4 support held, especially after we got Thursday’s natural gas storage report for the week ended Feb. 20,” said Steve Blair, a broker with Rafferty Technical Research in New York. “While the 101 Bcf draw wasn’t as bearish as the previous week’s 24 Bcf draw, it was still bearish. I’m surprised we didn’t blow below $4 after we got that number.”

The afternoon rally was also surprising as the U.S. economy remains on life support and winter — along with colder temperatures — continues to wind down.

Traders attuned to the state of the economy and looking for improvement were not happy with the Commerce Department’s Friday release of preliminary estimates of fourth quarter Gross Domestic Product (GDP) data. The advance estimate released in January showed fourth quarter GDP at minus 3.8%, but economists were expecting a downward revision to minus 5.4% in February. The actual figure was minus 6.2%.

The National Weather Service’s six- to 10-day forecast covering March 5-9 also wasn’t helping the bulls’ case. New England and West Coast states are expected to be the only areas recording below-normal temperatures while the vast majority of the country is expected to experience normal to above-normal conditions.

Looking at the longer-term weather picture, the bulls might be able to gain some better traction. Chief Long Range Forecaster Joe Bastardi said Thursday that much of the U.S. could expect colder-than-normal temperatures through March and April (see Daily GPI, Feb. 27).

Top traders remain bearish. “Our trading bias remains bearish as we continue to view the possibilities of an additional 25-30 cents on the downside at the front of the curve as a high probability,” said Jim Ritterbusch of Ritterbusch and Associates. “With this in mind, we would continue to suggest maintaining a modest short position for multiple-contract traders, placing stops above this week’s highs.”

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