May natural gas futures traded within a slim range for the second consecutive session on Friday before closing at $7.801, down 12.3 cents on the day but 19.4 cents higher than the previous week’s close on Thursday April 5.

“While we were rebuffed by the $8 level during the week, I don’t think we are finished yet,” said Steve Blair, a broker with Rafferty Technical Research in New York. “We got to $8.010 on Wednesday but we failed miserably. If we had gotten up past $8.050, our next resistance is not until $8.400. That large rally Wednesday was likely the utilities. While they normally would be buying gas in the cash market for placement in storage at this time of year, they were instead buying cash gas for the purpose of utilization due to the recent cold snap.

“I think we are going to hang up at these price levels for a while. What everyone will be looking at this coming week is the storage report for the week ended April 13. Word is that we are going to see a withdrawal from storage, which is unusual for the second week of April. Not only are we likely to see a draw, I am also hearing it could be an all-time record draw for April. While that doesn’t mean we are going to see 100 Bcf to 200 Bcf removed from storage, the initial indications are that it could be as high as a 50-55 Bcf withdrawal.”

Blair noted that with that report on the horizon, a significant question needs to be answered. “Was that run-up to $8.010 a product of the futures market pricing in the storage withdrawal?” he asked. “Are we in a ‘buy the rumor, sell the fact’ situation? I think we might be. The other side of the coin is if people start expecting a 40-50 Bcf withdrawal and we don’t get it, how hard will the market sell off?”

The broker noted that crude futures have come back into the picture as a role model for natural gas. “The natural gas market has been mimicking the crude market the last two days,” he said. “I think after Wednesday’s large move to the upside, natural gas futures lost direction and latched on to crude. I really think natural gas was a puppet of the crude market.” May crude futures shed 22 cents Friday to $63.63/bbl.

Weather bulls were excited late in the week as major energy markets in the Northeast are on track to get pummeled by a major storm system. The Weather Channel reported that a major storm would develop Sunday off the East Coast, which may have historical implications, the forecaster said.

“Look for heavy rain and fierce winds by Sunday night and Monday morning from the Middle Atlantic region to New England. Coastal flooding and wind damage are possibilities. Interior sections of the Northeast, especially the higher elevations, may see some record snowfall from Sunday night through Tuesday,” the forecaster said.

The cold weather may be in place for a while. AccuWeather in its six- to 10-day forecast shows below-normal temperatures in the Pacific Northwest and east of a broad arc extending from Michigan and through the middle of Tennessee to southern Georgia. Texas, Oklahoma, Kansas and New Mexico are expected to be above normal.

Unseasonable cold weather or not, traders see $8 as a tough barrier to break. “We continue to view the $8.00 area as the high side of our expected price parameters over the near term,” said Jim Ritterbusch of Ritterbusch and Associates. He did admit, though, that on a very short-term basis a “brief violation of this psychological resistance level” was possible. “We continue to suggest holding any previously established long summer/short fall or winter spread positions.”

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