Despite a substantial 16-cent range, the futures market postedits smallest daily move of the entire week on Friday with July onlymanaging a 2.7 cent gain to end the regular trading session at$4.160. August rose 3.5 cents to $4.140. The 12-month strip inchedup to $3.938.

“Today we saw the market trying to go up but only meeting withlimited success,” said one futures analyst. “We got somefollow-through buying off Thursday’s rally that supported us on theopening and got us up to that $4.24 high but we never found secondgear.” July started the day at an opening low of $4.079 and soaredfrom there to reach its high by noon. But it stepped back someduring afternoon trade.

Failure to settle above $4.18 may indicate a near-term limit tothe upside, according to one broker. If July can cross and holdabove that level, another breakout to the $4.30s or a test of $4.55could be possible, he added. But there are significant hurdles toget beyond the all-time high at $4.60 in the near-term.

The market got some mixed news on the weather last week. TheNational Weather Services said Friday in its latest six to 10-dayforecast that the huge swath of expected above normal temperatureswhich had been present in Wednesday’s report moved eastward overthe states east of the Appalachians. The latest report now shows aneven larger area of expected below normal temperatures over theentire Midcontinent and Midwest regions.

In addition, the heatwave expected in the Northeast over theweekend is not expected to last far into the week. “It’s going tobe toasty tomorrow. It’s hitting the Northeast over the weekend,though, which cuts us a little bit of break in terms of theelectricity loads, and it looks like temperatures will moderateinto the middle of next week,” noted one trader.

The outlook for next week’s AGA storage report also is somewhatmixed because during the comparable week last year a below-averagestorage injection of 63 Bcf was reported. Despite the fact thatstorage levels will remain at historic lows, even asmaller-than-average injection could look like a lot compared tothe previous year. The average injection for the week ending June 9over the last six years has been about 88 Bcf.

“If we get something in the 70-80 Bcf range for a refill, whichI think is possible, at least given the forecasts for degree daysfor this week, it would give us a little bit of a down tick in the[year-on-year storage] deficit and that would be a little bearishjog to the market,” said the futures analyst.

“We could flush below $3.80. I don’t view that as any kind ofmagic floor or a make or break number. It might clean out a fewmore sell stops and flush some stale longs out of the market. Theselongs represent potential selling so it could actually end up beingkind of bullish.”

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