Following Monday’s 8% price erosion and ahead of July expiration today, natural gas traders adopted a wait-and-see approach Tuesday, as light buying was slightly overpowered by continued short selling. At the closing bell, the July contract was 4.9 cents weaker at $3.397. Volume was light for a penultimate trading day with only 82,002 contracts changing hands.

With little to look back on in Tuesday’s session, traders eagerly turned their sights toward the release of fresh storage data today. Several traders thought it only fitting that after pressuring prices lower throughout the entire month of June, the weekly AGA storage report will likely have the last word on July’s final resting place when the contract goes off the board today. Market estimates ahead of that report range from as little as 85 Bcf to as much as 120 Bcf, with most expectations in the 95-105 Bcf range.

Despite the probability that today’s storage report will exceed last year’s injection, Tim Evans of IFR Pegasus is cautious of a rebound. “While we still foresee a 110-120 Bcf build in last week’s storage with a clear bearish implication relative to last year’s 73 Bcf comparison figure, Monday’s drop may have already discounted a bearish reaction, setting up the risk of a ‘sell-the-rumor-buy-the-news’ response once the data is released. Over the intermediate-term, though, we see no clear end to the bearish storage trend, now in its 12th week.”

After taking a 40 cent profit on half of his July short position at $3.47 Monday afternoon, Evans looks to “pinch a buy stop protection on the balance of the exposure” (from $3.87) down to $3.56. The July contract expires today at 3:10 p.m. (EDT).

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