Natural gas futures trading on Wednesday was akin to watching paint dry as the May contract traded within a tidy 22-cent range from $6.940 to $7.160, making it the second half-hearted effort to sub-$7 prices in as many days. The prompt month ended up settling at $7.069, up less than half a cent from Tuesday’s close.

“We just seem to be in a little over a dollar range from $6.40 to $7.50,” said Steve Blair, a broker with Rafferty Technical Research in New York. “The storage situation hasn’t really changed. There is plenty of gas in the ground and a sizeable overhang over historical comparisons. With the fundamental picture unchanged as of yet, the market seems to be very comfortable in this price range.”

Blair added that continued strength in the petroleum complex continues to lend support to natural gas futures prices. May crude climbed 84 cents Wednesday to close at $67.07/bbl. “Petroleum continues to stay strong, especially with tension all over the world in places like Nigeria and Iran,” Blair said. “Natural gas on the other hand is a very domestic market, at least until more liquefied natural gas starts crossing the oceans. The natural gas market doesn’t have as many far-reaching concerns right now. It seems very comfortable at these prices.

“I am definitely not bearish here. I don’t think natural gas will get under the $6.40 to $6.50 level and I definitely don’t expect the market to break below $6,” he continued. “There is much more potential for this market to bounce to the upside in a big way. The odds are the market will take off significantly higher sometime during the next few months.”

Echoing the market’s overall consensus of late, Blair said the next news that has the potential to move the market is early heat this spring, followed by how hot the summer turns out to be. The summer also brings hurricane season concerns, where the devastation of 2005 is still fresh in the minds of traders.

“The energy industry will be fine as long as a hurricane doesn’t get into the Gulf of Mexico,” he said. “The minute you hear of a storm getting past Cuba and heading for the Gulf, this market is going to take off.”

Another trader agreed that things have been pretty slow in the natural gas market. “From a trading standpoint, natural gas is almost dead in the water,” said a trader with Coquest in Dallas. He said there hasn’t been much movement lately, but “I think lower numbers are coming, I just don’t know when. I expect prices to head to $6.30.” But he noted that he had little to substantiate that price other than it fit his technical charts.

A New York floor trader had a similar observation. “The funds are getting pretty chopped up and they often end up buying the $7.40s and $7.50s and then selling at the low $7s. Their short-term models don’t seem to be working very well.”

Other traders are having similar difficulty. Phil Flynn of Alaron was stopped out on his long May natural gas at about $7.00 when May traded down to its low of $6.97 Tuesday. He now recommends buying May natural gas at $6.87 with a stop at $6.84.

The market’s attention will turn to natural gas storage Thursday morning as the Energy Information Administration releases what many expect will be the last withdrawal of the season.

For the week ended March 31, most industry withdrawal estimates seem to be focused on a low withdrawal. According to a Reuters survey of 25 industry players, storage levels were expected to fall by approximately 18 Bcf for the week. The ICAP derivatives auction revealed a consensus withdrawal of 21 Bcf in trading after the close of the Nymex day session Wednesday.

The number revealed Thursday morning will be compared to last year’s 1 Bcf injection and the five-year average withdrawal of 14 Bcf.

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