Following the one-two bearish punch Thursday of an upward revision in natural gas storage levels and an unexpected 16 Bcf injection for the week ended Nov. 14, December natural gas futures were on the rebound Friday, reaching a high of $6.548 before closing at $6.480, up 16.4 cents from Thursday’s close and 16.8 cents higher than the previous week’s finish.

“I think part of Friday’s rebound certainly had to do with options expiration,” said Steve Blair, a broker with Rafferty Technical Research in New York. “There was a huge amount of open interest at the $6.50 puts. Right at the close we pushed right up to that level. The strong options interest in that $6.500 level certainly helped futures end up right there. I also think we saw a little bit of a corrective action on Friday following Thursday’s 40-plus cent drop.”

Looking at the overall price level, Blair said the $5.990 prompt-month low back on Oct. 27 could very well be the floor. “I don’t know whether it is too early to say the bottom is in. While we have almost 3.5 Tcf in storage after the second week of November, we are entering winter, so the colder temps will likely begin drawing down supplies. Unless we go completely mild on the temperature front again, I can’t imagine that we could fall much lower. Now if we don’t start drawing from storage soon, I think we would test that $6 level again.”

Some market watchers still see commodities being led by the global financial turmoil more than by their own fundamentals. “Commodities are getting sucked down along with everything else, and in the current environment attempts to predict where price floors may lie in individual markets, or which commodities might outperform relative to others, is proving futile,” a team of Barclays Capital analysts wrote in a research note Friday. “In a sign of the times commodity price movements have ranged between a 14% increase in the price of cocoa over the past week to a 13% decline in the price of tin.”

They noted that against a backdrop of hugely illiquid markets, the number of interlinked moving parts on the fundamental side and the size of those movements “is making rational analysis exceedingly difficult.” The team added that in a number of commodities, the number of shorts is increasing. “High levels of price volatility are set to continue and with technical traders having built very sizeable short positions in some markets, the danger of violent short-covering rallies is growing.”

Some analysts suggest that traders might want to turn their attention to what could be a long, cold winter. According to Peter Beutel, president of Cameron Hanover, a Connecticut-based energy consulting firm, traders are already looking beyond the storage report for the week ending Nov. 21 to the report for the week ending Nov. 28, which “will reflect almost a full week of colder readings from northern Texas and the upper part of Florida to the Canadian border from North Dakota to Maine. That is as inclusive a cold weather pattern as anyone ever sees in this market.” He added that traders might want to take heed of a trading maxim that says “if it is cold in New York, Chicago and Dallas, all at the same time, it is bullish.”

One out of three might not be enough. The Weather Channel forecasts that Monday’s high in New York is expected to reach 49, just one degree below normal, and Dallas is expected to see a toasty 68, four degrees above normal. Chicago, however, is forecast to shiver under a high of only 39, seven degrees below normal.

As severe as Thursday’s 42.7-cent drubbing of December futures was, analysts note that futures still have yet to either penetrate a key support level or bounce higher. “This is week five that has held the key $6.110 [support] but been unable to launch a rebound. [We] still see the near-term risk of a decisive close below the $6.110 level as a drop to the $5.475-5.375 zone,” said Walter Zimmerman of United Energy.

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