With little in the way of fresh fundamental information, natural gas futures traders quietly took profits Friday in sparse pre-weekend trading. In contrast to the previous Friday’s frenzied long liquidation, the selling late last week was light, evidence that traders like the market’s chances of climbing higher when trading resumes this week. The October contract finished at $4.771, down 3.9 cents for the day, but up 4 cents for the week. At 39,107, estimated volume was extremely light.

Sources polled by NGI agreed that Friday’s softness could be chalked up to futures prices moving lower to converge with the cash market. At $4.77, NGI’s Henry Hub average was nearly flat with the Nymex settlement. On Thursday there was an 11-cent gap between the cash and futures markets. Looking ahead, cash prices might continue to ascend this week, as temperatures are expected to heat up across portions of the East.

According to the latest National Weather Service six- to 10-day forecast, warm weather is forecast from Maine to Minnesota and south to a line drawn from Arkansas to North Carolina later this week. Above normal temperatures are also predicted in California, Nevada and New Mexico. Below normal mercury readings, meanwhile, will be confined to the Rocky Mountain states.

And while that forecast will likely add some heft to the cooling degree day accumulations for the week, market-watchers are quick to note that the cool-down that is inevitable in September will eventually lead to stronger storage injections. For Citigroup analyst Kyle Cooper, however, that time is now. “Our initial estimation for [this] week’s EIA storage report looks for a build near 100 Bcf,” he wrote in a note to clients Friday. “A build [of only] 85 Bcf would exceed the five-year average by 25% and continue to place inventories on track to reach the 3,000-3,050 Bcf range.”

Meanwhile, Tim Evans of IFR Pegasus calls for a weekly storage build in the 80-90 Bcf range, which would still compare bearishly versus the 74 Bcf addition from a year ago. “The constructive storage data for the past two weeks may not carry over to the next report, as temperatures [last] week have been cooler than normal, crimping late summer cooling demand.”

In daily technicals, Friday’s softness did little to dampen the bullish euphoria from late last week. Accordingly, most market-watcher and chartists feel the momentum remains to the upside. Failed support at $4.86 now serves as resistance with a move higher likely to invoke additional selling at $4.93. Psychologically, the $5.00 level is also a key upside target. On the downside, a break of $4.55 would jeopardize the uptrend.

NYMEX and EIA schedule for Sept. 11: In observance of the anniversary of the World Trade Center tragedy and in remembrance of the 21 members and former members that perished, the New York Mercantile Exchange will delay the opening of open outcry trading this Thursday from 10 a.m. ET until 10:51 a.m. ET. Trading and clearing on Nymex’s electronic systems will be closed during that period. In response to Nymex’s late opening Thursday, the EIA announced Friday that it will delay the release of its Weekly Natural Gas Storage Report from 10:30 a.m. ET to 11:15 a.m. ET.

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