With Passover beginning Tuesday and Good Friday acting as a book-end, claims that this week could be “quiet” held true Monday as the natural gas futures May contract tested the $5.9 level early, but used the rest of the session to meander downward, closing at $5.804, less than a cent lower than Friday’s close.

“The futures market hasn’t really broken back down after that huge day up last week,” a Washington, DC-based broker said. “Everything we are doing right now sort of looks corrective within this uptrend that we have now re-established. As bizarre as it seems, I tend to think the bulls have control of this thing again.”

He added that he wasn’t sure of what created last week’s spark, noting that it could have been any number of factors coming into play, such as the recent cold snap, industrial demand return, or feelings on the economy.

“This week is going to be a tough week due to all of the religious holidays, spring break and things like that,” the broker said. “I tend to think trading volumes are probably going to be on the light side, and some people may feel that that lessens the impact of the price movements from what we are reading into them.

Acknowledging the recent cold weather, the broker added that even if Thursday’s storage report reveals a big withdrawal last week, storage is still in decent shape compared to last year.

Stephen Smith, of Stephen Smith Energy Associates in Natchez, MS, projects a 13 Bcf storage build for the week ending April 2, compared to a normal seasonal draw of 4 Bcf (based on 1994-1998 norms). Adding that projection to current figures will increase the current surplus over the 94-98 norm to 140 Bcf (see related story). “This surplus storage position is in sharp contrast to the storage deficit that existed at the same time last year,” Smith said.

Highlighting the current cold snap, Tim Evans of IFR Energy Services, said “The natural gas market continues to garner support from the current pattern of cooler-than-normal April temperatures, which looks sufficient to drag out the end of the withdrawal season. Heating degree day accumulations for last week matched those of a week before, suggesting the 18 Bcf net withdrawal from Thursday’s report may be matched by a further 10-20 Bcf decline.

“While matching the withdrawal in absolute terms, this would be even more supportive on a comparative basis, where it will be evaluated next to an 8 Bcf draw from last year and a 1 Bcf five-year average pull. This may give the market some upward potential, even from current levels, which already discount the weather pattern to some degree, and may allow an even broader seasonal advance to take hold.

“However, it is not without its risks, as we think tumbling petroleum prices may undercut the sentiment for natural gas and the weather, as always, may prove changeable,” he said.

Making his assumptions prior to Monday’s settle, Evans said “the price pattern over the past 3-4 sessions has been a possible bull flag continuation pattern, hanging off the flagpole erected off the 5.34 low from March 25. This implies an eventual breakout above the recent 5.94-5.99 highs with a run to projected selling next at 6.25 and again in the 6.50-6.55 area. On the downside, a break of support at 5.69-5.71 would call that scenario into doubt, with failed resistance at 5.48- 5.51 as the next target, followed by the 5.34 low.”

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