After sinking below $11 and giving bears some glimmer of hope, June natural gas futures on Tuesday rebounded to record a high of $11.477 before closing out the regular session at $11.365, up 41.1 cents from Monday’s finish.

The significant rebound, which followed three consecutive regular session declines, had natural gas traders and analysts divided on what the market would likely do next.

“We will see what happens later this week, but I think the recent pullback was a little bit of a corrective action,” said Steve Blair, a broker with Rafferty Technical Research in New York. “As I have been saying, I didn’t expect the market to get much above our resistance lines at $11.630 and $11.780. When we pulled back, I did not expect us to come off this far. Our major support is down around $10.800.”

Addressing Tuesday’s rebound, Blair said the natural gas futures market rallied back “pretty well” as crude futures shot toward $130/bbl. June crude reached a high of $129.60/bbl before closing out the day at a new record high of $129.07/bbl, up $2.02 from Monday. “I think the strength in energy Tuesday probably had something to do with the CNBC interview of T. Boone Pickens,” the broker said. “A synopsis of what he said is that he believes crude will hit $150/bbl by the end of the year. He also said power generation should move away from natural gas and into renewable sources like wind, which would free up natural gas supply for transportation and reduce the country’s dependency on imported crude oil. He also confirmed that he is long natural gas.”

Looking at the general direction of things, Blair said he sees things range-bound in the near term. “Depending on what happens with storage on Thursday, I get the impression that we have made our highs and lows for the time being,” he said. “The high being the $11.794 from last week and the low being Monday’s $10.857. That is probably the range we are going to stay in for a bit as we continue to track with crude for the most part. Every once in a while natural gas decides to have a slight mind of its own. I think the strategy is still to buy the dips while keeping your peripheral vision on the crude market’s action.”

With June futures putting together back-to-back declines of 30.5 cents on Friday and another 14 cents Monday, some market technicians were suggesting the likelihood of the bull market being over. Since Wednesday of last week the June contract had had three consecutive days of lower high prices and lower low prices, signaling to some that a trend lower was in place.

Others aren’t so sure. Some traders view the recent price slide as temporary within an overall framework of higher prices. “We are continuing to view the price slippage of the past two weeks as corrective in which the market is simply storing up power for another sizable price advance,” said Jim Ritterbusch of Ritterbusch and Associates. He also conceded that in the near term it was unlikely that prices would sustain any meaningful advance because “price rallies during the ‘shoulder’ period usually prove unsustainable given [a] lack of weather-related demand. With this in mind, an approximate 27% advance since the official start of spring in the June futures proved impossible to be maintained, even within an environment of continued strong oil pricing.”

A lack of weather-related demand may be the case in the East and Midwest, but in the West a weekend heat wave culminated in Las Vegas baking under a 108-degree high Monday, 19 degrees above normal. Curiously, “These occasional early outbursts of heat are about the best the West can hope for this year,” said forecaster Weather 2000. “From sea breezes to closed lows to troughs to a robust monsoon, the western U.S. will have a lot to juggle this summer, making 2008 likely one of the least hot summer seasons this decade.”

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