After a few roller-coaster ups and downs during morning trading, the July natural gas futures contract spent the afternoon on a steady decline, closing down 9.2 cents at $6.115. Notching its fifth consecutive down day, the prompt month once again approached the psychological $6 level as it reached a low on the day of $6.095.

Sticking with the recent trend, gasoline and crude futures also sagged Tuesday, with gasoline dropping 3.51 cents/gal and crude shedding $1.38/bbl. Following the significant sell-off over the last handful of days, the July crude futures contract now sits at $37.28, miles away from the $42.38 high set on June 1.

“The natural gas market remains weighed down by the poor performance of the petroleum complex, lackluster recent storage data and the return of some nuclear power plants to the grid, following refueling,” said Tim Evans of IFR Energy Services. “This was apparently more than enough to offset some warmer temperatures this week that would normally have resulted in stronger cooling demand.”

Evans noted that the downturn from the early $6.275 peak confirms minor resistance at that level, adding that the market would need a second effort to move past that barrier to spark a recovery to the $6.37 area, where he sees additional selling ahead of the heavier opposition in the $6.45-6.50 area. “While a fundamental shock could produce a further look at the $6.73-6.805 top, we don’t see nearly enough of a technical base of support to propel an advance that far,” he said. “In fact, the $6.08 floor from Monday may still be at risk as unconfirmed support.”

On the downside, Evans said that new lows would probe failed spot resistance at $6.03 as the next possible support, but “the market could be destined to probe the weekly uptrend, climbing through $5.85, particularly if crude oil comes under the kind of downdraft we think possible.”

Making the Energy Information Administration’s natural gas storage report relevant again, Thursday’s number for the week ended June 4 may have some effect on prices for the first time in a number of weeks.

Evans said he expects a 110 Bcf injection, which far exceeds the 96 Bcf five-year average by a comfortable margin. “While the injection would fall short of last year’s strong 125 Bcf build, we don’t know of anyone who considers last year’s record pace of injections as even remotely possible or particularly relevant for comparison purposes,” he said.

Kyle Cooper of Citigroup said he is looking for an injection of 100 Bcf, noting that industry consensus is calling for a build between 95 and 105 Bcf.

“This will compare against a weekly build last year of 114 Bcf,” Cooper said, noting that his weekly data for last year reflects the fact that last year’s number included 11 Bcf of gas that had been reclassified from prior reports and was simply added as a single weekly revision. “Thus, most other comparisons will probably list a build of 125 Bcf,” he said, adding that the situation will occur again in July when one week has a build of 147 Bcf due to a “true-up” of the new methodology that was employed in October 2003.

In observance of the national day of mourning for former President Ronald Reagan, the New York Mercantile Exchange Inc. said Monday that it will join other financial markets in closing on Friday.

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