After zigzagging for a majority of the trading session within a $6.18-6.26 range, the June natural gas futures contract finally found traction in the afternoon, jumping up to ring the $6.35 bell before closing at $6.31, up 4.1 cents on the day.

Wednesday was the second consecutive day of single-digit rises following Monday’s 36.9 cent leap higher. Despite closing higher on the day, some analysts were more interested in the fact that Wednesday’s $6.14 low remained above the $6.11 peak from April 12.

“The $6.14 low for June Wednesday held above the $6.11 peak from April 12 as failed resistance and we see further buying from there down to the $6.01 peak from April 28,” said Tim Evans of IFR Energy Services. “Only past that point do we see the developing uptrend called into doubt, even though prices might still hold somewhere within last week’s congestion ahead of the $5.825 low from April 29.”

As a result, Evans said longer-term support from $5.74 down to the $5.544 low of April 20 should be safe from further review for now. Looking to the upside, the analyst said that Tuesday’s $6.36 high takes on some greater importance as at least interim resistance now, although he believes the market may still have a chance to investigate the projected selling in the $6.50-6.65 range or even the $6.95-7.00 area before an intermediate-term correction is necessary.

“Today’s move to the downside may not have been a full test, but it looks to us as if the market has largely passed what amounted to a pop quiz,” Evans said in his PM Energy Report. “Prices have shifted into a somewhat more defensive posture, pending Thursday’s DOE storage report, which we see as likely to show 75-85 Bcf in net injections, similar to the 78 Bcf refill from last week but less bearish relative to the 65 Bcf five-year average which we see as the best benchmark for comparison.” Last year’s storage report for the week revealed an 82 Bcf build.

Looking ahead, Evans said he thinks that more bullish comparisons are likely, especially relative to the data from last year, which showed above average injections from May right through what proved to be a cooler-than-normal summer. “We see enough heat in the short-term outlook as well as in the long-range view for the summer to spark a further uptrend to reflect this bullish potential,” he said.

For the storage report covering the week ended April 30, Kyle Cooper of Citigroup is calling for a build between 64 and 74 Bcf, while Lehman Brothers’ Thomas Driscoll is looking for an injection of 80 Bcf. The average expectation of the industry is for a build between 70 and 76 Bcf.

“We estimate that warmer weather (52 HDDs vs. 55 HDD last year) reduced heating demand by about 5 Bcf versus last year,” Driscoll said. “Last week’s weather was 21% warmer than the 30-year normal and 6% warmer than last year.”

Speaking on last week’s 78 Bcf injection report for the week ended April 23, Driscoll noted that the weather for the week was 35% warmer than the 30-year normal. So far this season, the weather (based on heating degree days) has been 5.3% warmer than the 30-year normal, he said, adding that the warm weather has depressed demand by about 230 Bcf.

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