After inching higher to close last week’s action, May natural gas futures on Monday traded in a tight 9.8-cent range before closing out the regular session at $3.732, down 6.9 cents from Friday’s finish.

Devoid of any fresh bearish news, the drop in natural gas futures could have been in sympathy with the action in crude futures. May crude dropped below $50/bbl on Monday before closing at $51.05/bbl, down $1.46 from Friday.

Back in natural gas it appears to be the same old story of the past few months of an ailing economy, too much supply and not enough demand. “Natural gas futures continue to sag without sufficient heating demand to offset the lost industrial offtake due to the weak economy,” said Tim Evans, an analyst with Citi Futures Perspective in New York. “This remains a demand-dominated story. We do expect a supply response based on the 42.8% year-on-year drop in the Baker Hughes rig count on a combined U.S. and Canadian basis, but so far production seems to be just holding steady. And while falling production will be a supportive factor for natural gas prices over the second half of the year, we see no urgent reason to buy on April 6.”

Bulls will be receiving no support from the near-term weather forecasts either. Frontier Weather’s six- to 10-day outlook for April 11-15 calls for cooler-than-normal temperatures west of the Rockies and above normal along the Gulf Coast, with normal readings elsewhere. In the 11- to 15-day forecast period covering April 16-20, temperatures are expected to average near normal across the continental U.S., with some spots of cool readings in the northern Plains and Michigan’s Upper Peninsula as the only exceptions, the private forecasting firm said.

The number of rigs drilling for gas in the United States continues to contract. Baker Hughes Friday reported that for the week ended April 3 the number had fallen to 808, down two from the previous week and 650 fewer than a year earlier. Current thinking puts a meaningful decline in production as requiring a rig count of about 700-750. Drilling rigs and production are not a one-to-one correlation. Marginal prospects will be the ones to be jettisoned quickly while higher-volume and more profitable drilling will continue. Others have placed the rig count needed for a production impact at as low as 600.

Some are looking at more of a time dynamic. “With rig counts falling every week, up until this latest report by significant numbers, we know that supplies are likely to continue dropping, possibly for the next 12 months or more,” said Peter Beutel, president of Cameron Hanover, a Connecticut-based energy consulting firm. He sees the combination of lower prices and an improving economy as eventually making lost production an important factor. “It is not right this moment, mostly because the economy has not yet turned the corner, but it is really just a matter of time,” he said.

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