After trading mostly sideways for the past 11 sessions in a range from $6.875 to $6.31, May natural gas — with help from the petroleum futures complex — broke more than 40 cents lower in two separate waves of trading on expiration day Wednesday before going off the board at $6.748, a whopping 37.2 cents below Tuesday’s settle.

In wave one the prompt month recorded a low of $6.87 just before 12:30 p.m. EST. Wave two, which came in the afternoon after a pause, saw May natural gas plummet significantly lower and record a low trade on the day of $6.68 before expiring at $6.748. Taking over as prompt month, June natural gas also felt the shake-up, dropping 38.1 cents to close at $6.80.

May natural gas’ $6.68 low on the day was the lowest a prompt month has reached since the April contract hit a low of $6.63 on March 7.

Weakness was the theme of the day as the entire petroleum futures complex was in on the act. June crude sank $2.59 to close at $51.61/bbl, while May unleaded gasoline and May heating oil also slipped 8.32 cents and 3.39 cents to close at $1.5419/gallon and $1.4740/gallon, respectively.

“It was very busy this morning down on the floor with the expiration going on,” said Steve Blair of Rafferty Technical Research in New York. “I think a lot of the drop in natural gas was simply the market following petroleum futures. The Department of Energy crude stocks report came out and revealed a pretty big build in crude. So crude got hammered, gasoline got hammered as well and natural gas got taken for the ride.”

While a number of brokers have been skeptical of a natural gas and crude tie, Wednesday’s morning action was tough to argue against. “It just seems so coincidental that the natural gas market started to come off right after the crude market started to come off,” Blair said.

Trading on Wednesday took out Blair’s support levels at $6.88 and $6.75. In addition to the petroleum sympathy, Blair said the fact that it was expiration day also played a part in the size of the move.

“I think we are still playing that game of the market looking for some direction,” he noted. “We are still in the shoulder month and I think the next real direction is going to come from weather.” Commenting on the numerous forecasts circulating, the broker said “weather is always a big if.”

A Washington, DC-based broker agreed that crude really lurched down and natural gas followed it, but he also added that the sell-off could have been psychologically inspired as well.

“I think we saw a major break in the market Wednesday,” the broker said. “The seasonal bent was that natural gas futures would resolve to the upside and Wednesday’s trade really caught a lot of people flat-footed, I think.”

While there are a number of minor support levels below June natural gas’ current position, the broker said he believes the next real support comes in around the neighborhood of $6.20. “While we have some lower price levels targeted from here, it is not a collapse of the economy as it stands right now,” he said. “There have been a heck of a lot of industrial end-users that have been dreaming of this price break, but the question is will they start taking advantage of it. That said, I don’t think this is the return to $4 gas in any shape or form.”

The broker noted that President Bush’s comments on high energy prices could have also factored into the energywide sell-off. Bush discussed energy policy Wednesday during remarks at the U.S. Small Business Administration’s national small business conference in Washington, DC.

“For the first time in my recollection, the oil man from Texas has come out and said that he has come up with some ideas to bring energy prices down,” the broker said. “They are not going to work. Refineries are not going to be built on army bases as it stands now and tax credits are still a year away from even being enacted…if they are enacted. All of this stuff isn’t going to do anything in the near term.”

However, when the president calls a meeting on energy issues, the market can take notice, he said. “There is always the psychological element to the market and perhaps this announcement acted as part of it.”

Looking ahead to the Energy Information Administration’s (EIA) storage report release Thursday morning for the week ended April 22, the broker said he is expecting a 65-71 Bcf injection, which would come in above the EIA’s 51 Bcf five-year average injection, but right in line with last year’s 71 Bcf build. “We will have to see what the snowstorm did and whether there was any more use of the molecules due to colder weather,” the broker said. “Maybe that will help out to stem the sell-off here.”

The final ICAP-Nymex storage auction for the week, which ran from 3-4 p.m. EST on Wednesday, projected that the report would reveal a 73.4 Bcf injection.

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