Traders pushed natural gas futures higher for a second consecutive session as the May contract added 3.9 cents to close at $4.199. Despite the rise, some market watchers are not ready to say that the seasonal advance has begun just yet.

Following Monday’s decline and Tuesday’s and Wednesday’s upticks, the prompt-month contract currently sits 12.9 cents higher than last Friday’s close. Even with the week’s net gain, some industry veterans are far from pegging the rise to any bullish shift in fundamentals.

“The natural gas market is making a further effort at turning back to the upside, having uncovered some buying interest in the $4 area,” said Tim Evans, an analyst with Citi Futures perspective in New York. “We’re being careful in describing this as ‘buying interest’ rather than demand, since we think we’re mostly seeing some speculative short-covering and long accumulation that is driven more by the idea that the risk/reward equation has rebalanced after the long slide from February trade in the $5.50 area, rather than on any particular physical tightening in evidence.”

For example, Evans said the Energy Information Administration’s storage report Thursday for the week ending April 9 may show net injections of 70 Bcf (Evans’ prediction) or more, well above the five-year average of 21 Bcf.

Looking toward the 10:30 a.m. EDT report, the number revealed will also be compared to last year’s date-adjusted 21 Bcf build. A Reuters survey of 29 industry insiders produced a 66 Bcf to 89 Bcf build range with an average build expectation of 78 Bcf.

Recent gains have not prompted analysts to retreat from their assertion that the market is rangebound and needs to break higher or lower before the price outlook can become clearer. According to Brian LaRose, a technical analyst at United-ICAP, bulls can argue that a seasonal price advance has begun.

The bearish case is that recent advances are an “ABC advance off the $3.810 low,” and that correction is now nearing completion,” he said. “To suggest a seasonal advance is under way, the bulls need to clear both $4.380 (A=C) and $4.524 (the highest level consistent with a wave four correction in a subdividing five-wave decline). Only if these levels can be exceeded should higher objectives be considered.”

An improved economic outlook was the interpretation of market observers following Tuesday’s release by the Department of Commerce of February balance of trade figures. Expectations were for a deficit of $39 billion but the actual figure came in at a $39.7 billion gap. Strength in imports and exports was cited as the reason for the widening of the deficit. Longer term the trade deficit is expected to cause weakness in the dollar relative to other currencies, but the increase in imports was viewed by some as an indication of rising U.S. demand and economic gains.

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