Breaking paths with the petroleum futures complex, June natural gas on Wednesday traded within a 15-cent range on the day before settling at $6.683, down 1.1 cents on the day.

While crude, unleaded gasoline and heating oil futures all recorded losses as well, their declines were a lot more pronounced thanks largely to a bearish crude inventory report. June crude closed $1.62 lower at $50.45/bbl, while unleaded gas and heating oil were down 2.83 cents and 4.65 cents to settle at $1.4820/gallon and $1.4031/gallon, respectively.

The U.S. Energy Information Administration (EIA) said Wednesday morning that domestic commercial crude stocks rose 2.7 million barrels to 329.7 million barrels, which marked the twelfth increase in 13 weeks. Adding to the downward pressure on liquid prices was the release of the International Energy Agency’s (IEA) monthly petroleum report, which also had a bearish tint.

“Natural gas futures really did not follow the petroleum complex down on Wednesday at all,” said Steve Blair of Rafferty Technical Research in New York. “I think it just reiterates the fact that we’ve got a pretty solid area of congestion in natural gas that the market is playing off of. Barring any really hot weather early, I don’t see any breakouts to the upside. I also can’t see a breakout to the downside as long as crude is up at $50/bbl.”

Blair noted that every time crude gets below $50/bbl, it is able to make some new low just before traders come in and “buy the hell out of it.” He said it is a similar situation in natural gas futures. “When you get down to the $6.40-6.50 level, that buying comes in again.” he said. “There really seems to be a level of price that traders believe the market should not be under. When the market dips below that level, the market becomes a buy.

“A lot of the drop in the petroleum sector had to do with the release of the IEA’s monthly report. It was a little bit bearish towards the petroleum sector. The crude inventory report didn’t hurt Wednesday’s bearish move either. Crude stocks are at the upper end of the five year-average range and approximately 30 million barrels over last year at this time.”

Weather developments continue to be a non-event from the perspective of natural gas traders. In the National Weather Service forecast, for the week ending May 14, the populous Mid-Atlantic states of New York, New Jersey, and Pennsylvania are expected to see only one cooling-degree-day, two less than normal.

“Closing down on the [Wednesday] should lead to further selling [Thursday], leading up to the 10:30 a.m. release of EIA,” said Advest Inc.’s Jay Levine. Looking at his natural gas futures support lines, Levine said he sees $6.575, followed by $6.42 and then $6.275. On the upside, he points to resistance at $6.95, followed by $7.125 and $7.35.

As for the EIA’s natural gas storage report release Thursday morning for the week ended May 6, a Reuters survey of 18 industry players pinned the average build estimate at 45 Bcf. The ICAP-Nymex storage options auction, which runs from 3-4 p.m. EDT on Wednesday, revealed a consensus forecast of a 46.6 Bcf injection.

Currently, inventories stand at 1,455 Bcf, 238 Bcf above last year and 293 greater than the five-year average. The May 6th storage number will be compared against last year’s 75 Bcf injection and the five-year average build of 72 Bcf.

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