Natural gas futures on Friday declined for the fourth consecutive session as the June contract shaved another 7.1 cents to $4.035. For the week the prompt-month contract dropped 27.7 cents, or 6% of its value.

After reaching a two-month high for the spot contract on Tuesday at $4.494, the gas futures market finds itself just three days later pounding on the $4 door. However, the psychological support level held at least on Friday as June futures reached a low of $4.020 before inching higher to close.

Some market watchers claim the recent pullback in gas futures values is a sign that the market can no longer ignore the bearish sentiment around it.

“Natural gas finally began to feel some of the effects from the other side of the energy complex, which has been really weak,” said Gene McGillian, a broker at Tradition Energy. “Natural gas also continues to experience bearish fundamental news that it can’t get out of the way of.”

McGillian told NGI some of those bearish fundamentals were highlighted Friday as it was revealed that the U.S. gas rig count climbed by 18 for the week ending Friday (see related story). “I think Friday’s decline likely had a lot to do with the fact that the rig count jumped up the way it did. The sellers really came in. Traders were also able to dismiss Thursday’s storage report of a 76 Bcf injection. While it was the smallest in four weeks, we’re still cresting at record levels of storage for this calendar week. Anyway you look at it, the fundamentals for natural gas remain pretty negative and without the buoyancy that rising oil prices and positive economic sentiment provides, the idea that the gas market was due for a good rebound seems to be dissipating rather easily.”

Focusing on Thursday’s market response to the 76 Bcf storage build, Barclays Capital analyst James Crandell noted that gas markets “again bore the brunt of heavy selling pressure across asset classes,” despite “a short-lived uptick” on the Energy Information Administration (EIA) inventory report.

“The EIA reported an injection of 76 Bcf, which was nearly at the center of consensus estimates. Some were likely expecting the release to land on the high side of this range, confirming the weak fundamental state of the market. However, the short pop higher in price could not be sustained,” Crandell said in a research note Friday. “The 76 Bcf injection was smaller than the build experienced both in the five-year average (93 Bcf) and last year (100 Bcf), owing to a late surge in heating demand in the Northeast.”

Analysts with Tudor, Pickering, Holt & Co. Securities Inc. noted that shoulder period injections over past three weeks have totaled 253 Bcf vs. 241 Bcf norm and 282 Bcf last year. “With normal weather, 2 Bcf/d Q2/Q3 LNG imports, slightly lower gas rig count and Canada import with base demand at about these levels, end-of-injection season would be 3,900 Bcf (vs. 3,850 Bcf last year),” the analysts said.

Over on the bulls’ side, the industry got a reminder Friday that the beginning of the 2010 Atlantic hurricane season is right around the corner. AccuWeather.com reported a large mass of clouds, showers and thunderstorms east of the Bahamas and well north of Puerto Rico that may develop into the first system of interest of the 2010 Atlantic tropical season. Current indications show this system affecting the southeastern United States next week.

“While this system is not likely to be a true tropical system, it may take a track more typical to a tropical storm or hurricane,” said AccuWeather.com meteorologist Alex Sosnowski. “During early next week, the system may become a ‘hybrid’ storm with both tropical and non-tropical characteristics.”

Sosnowski said that following this storm into June, the area from the western Caribbean into the Atlantic waters near the Bahamas “will remain a general weak spot in the atmosphere, where additional perhaps more potent storms systems may form.”

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