Coming off of a week that saw mostly single digit drops or gains, the Nymex May natural gas futures contract jumped out of the box Monday, closing 19.3 cents higher to settle at $5.764. The June contract also went on a run, climbing 21.8 cents to close at $5.871.

Sources were quick to point to buy stops triggered in the mid $5.60s as the primary fuel for the rally. “[When] we took out the first hour’s range, [there was a wave] of buy stops,” said Ed Kennedy of Commercial Brokerage Corp. in Miami. That, coupled with the absence of substantive selling, gave bulls the green light Monday. “The locals were the main buyers — not short covering by funds.”

He added that there was very little trade participation either way. “The locals then kept it firm,” Kennedy said, noting that “they’ve got this thing in their ear that for some reason natural gas should trade with crude. Crude was strong, so [natural gas] was strong.” June crude futures went up 51 cents on Monday to close at $36.97.

Looking towards May’s expiry on Wednesday, Kennedy said the prompt month may still rise “a little bit higher, but I think we are going to settle a lot lower, probably down in the mid to low 50s. There’s no shortage of gas, let’s not lose sight of that, and there is no weather to speak of,” he said.

Breaking down storage expectations in his latest Weekly Gas Outlook, Stephen Smith of Stephen Smith Energy Associates is projecting an 87 Bcf build for the week ending April 23, which would be significantly higher than last year’s injection of 52 Bcf and the five year average build of 46 Bcf. An 87 Bcf injection would take gas in storage from 1,077 Bcf to 1,164 Bcf.

“This result implies that the ‘seasonal storage vs. normal’ (relative to ’94-’98 norms) will increase by 41 Bcf, from 152 Bcf to 193 Bcf,” Smith said.

Tim Evans of IFR Energy Services, said he believes that natural gas futures seem to have reacted even more strongly than the petroleum complex on Monday, suggesting that the gains here may be “primarily technical in nature.” Despite sticking with his 60-80 Bcf net injection forecast for Thursday’s EIA storage report, Evans said bearish predictions are “clearly” not warding off buyers.

“The weather outlook has evolved to a somewhat more bullish configuration over the weekend, with some cooler than normal readings now expected in the Midwest heating markets,” he said. “Overall though, this is only a slight support to go along with the risk of summer heat and hurricanes that we see as the prime fundamental supports in the months to come.”

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