Trading within an extra thin 6-cent range, June natural gas futures on Friday appeared to be taking the day off to regroup. After trading just above or below Thursday’s settle for the entire session, the prompt month ended up settling at $6.343, down 1.4 cents on the day and 19.3 cents lower for the week.

Friday’s trading had all of the markings of a low-volume session, with no impetus in either direction. While June crude busted back above $47 during the session, the contract was unable to hold its ground. Crude settled at $46.80/bbl, down 12 cents on the day.

The first named storm of the season fizzled out Friday morning as Hurricane Adrian slammed the coast of El Salvador. Following land contact, Adrian was quickly downgraded to a tropical storm, followed by a further demotion to tropical depression as it crossed Central America.

“The whole market was quiet Friday,” said Steve Blair of Rafferty Technical Research in New York. “Natural gas traded within a 4-cent range until the very end of Friday’s regular session. My understanding is that there were a lot of locals missing from the Nymex floor Friday.”

Blair noted that the cool spring has really helped natural gas prices remain weak. “In a number of cities in the East, we should already be having some pretty consistent 70-degree days, but we just haven’t really had that.”

A Washington, DC-based weather commentator pointed out earlier in the week that his area by now normally has had 17 days when the thermometer tops 80 degrees. This year there have been five days above 80. It was another cold day Friday as temperatures, which routinely should show highs in the 70s along about now, struggled to hit the mid-50s.

Blair said that with the $6.40 support level already broken, the next targets down are $6.20, $6.00 and then $5.70. “I can’t see natural gas going sub-$6.00 as long as crude and heating oil prices stay strong. I don’t really think we are going to see petroleum prices duck down a heck of a lot lower than what we are seeing now because no matter what OPEC says, if these prices start to go down, they are going to do something. These guys like these prices.”

As for the upside, Blair said he is not sure how high futures would be able to get due to current fundamentals. “I think we have some limitations on the upside right now because of the plentiful storage situation,” he said. “If we continue to have cooler than normal temperatures in the East, we are going to continue to have bigger than normal injections into natural gas storage.”

On the storage front, the 90 Bcf injection for the week ended May 13 was very close to industry expectations. However, some market experts are concerned that the continually growing surplus over historical figures could allow the downtrend to continue for some time.

While the 90 Bcf build edged out last year’s injection of 84 Bcf for the week as well as the five-year average increase of 75 Bcf, IFR Energy Services’ Tim Evans said the key may be what the industry is not seeing.

“[What we are not seeing] is a consistent downtrend in the [storage] surplus that would indicate a tightening physical market that would help sustain what are still historically higher price levels,” Evans said. “Without any weather pattern on the immediate horizon to particularly limit storage injections, the market has nothing to prevent a further downtrend, aside from the occasional bounce in petroleum values such as the one [Thursday].”

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