August natural gas scored a double-digit gain Friday as traders noted what seems to be a never-ending series of forecasts calling for above-normal temperatures. At the close August was up 16.8 cents to $4.546 and September had added 16.2 cents to $4.520. August crude oil made an advance of its own adding $1.55 to $97.24/bbl.

Longer term, however, analysts saw the day’s double-digit advance as part of a longer process where the market is establishing a base from which to (presumably) advance. “I don’t see any reason to think that anything has changed yet,” said Mike DeVooght, president of DEVO Capital, a Colorado-based trading and risk management firm.

“We have a trading range from the high $4s to the low $4s. Every time the market falls down to $4 and holds increases the probability that it will pop through $5, but there is a lot of resistance up there.”

From a fundamental standpoint, DeVooght noted that concerns had been raised about some of the steep production declines in wells, such as those that develop coal seams, but “the reality is that there are still plenty of people willing to drill and bump up the production.

“What is finally going to break this market loose and turn it into a bull market? I don’t know. If you all of a sudden had the expectation that the U.S. economy was really going to start to do better, that could get things going. It’s hard to say what will confirm that the market has bottomed out.”

Analysts suggest that forecasted hot temperatures will maintain a firm tone to the market. “[M]eteorologists continued to forecast hot temperatures…It will be hot through a wide slice of the Midcontinent from the Dakotas through the mouth of the Mississippi River, and there will be a regular swath of brutal triple-digit temperatures over the next two weeks,” said Peter Beutel, president of Cameron Hanover.

The Northeast and East Coast were expected to get relief through the weekend, but by Monday, hotter temperatures were expected to have started slipping east and north. By Tuesday, readings in the high 90s will make it to Washington, DC, with low 90-degree heat in Minneapolis and Chicago and almost everywhere west and south, he said.

“Without the horrific heat spell, we would probably have had much more aggressive and sustained selling after the release of [last] week’s statistics. [Thursday’s] post-report selling was taken up by hedgers taking next week’s heat into account,” Beutel said.

Beutel is near-term cautious and cites prices “just below the upper blue Bollinger Band, which tells us that prices could be near their upper level near term. As a result, we need to be careful of a higher opening that places us near $4.45 or $4.46. That could give us a selloff that would leave us near the day’s lows by the close.”

Forecasters see a continuation of the pervasive heat that has immersed the central U.S. In its six-to 10-day outlook MDA EarthSat shows the entire central and eastern portions of the country east of a line from North Dakota to New Mexico with above- to much-above-normal temperatures. Only Florida is spared.

“A major heat event will continue into this period, with widespread much-aboves stretched across the Midwest. The core of the strongest heat will move from the Plains and Midwest early into the Northeast & Mid-Atlantic around mid period,” the forecaster said. It added that “Widespread highs well into the 90s to near 100 will be common under the strong upper-level ridge. Most models and other signals are still strongly in favor of this heat, keeping confidence moderate to high overall. There is some sign of a cool front finally pressing into the Upper Midwest late, but only a marginal cooldown is favored at this point.”

Friday’s advance puts the market in a new technical regime, according to analysts. Prior to the open analysts saw “the risk for further upside short term. However, to validate the bullish model we would like to see $4.418 exceeded,” said Brian LaRose, technical analyst with United-ICAP. “Accomplish this and the A equals C objectives from $4.064 will be our initial upside targets.” His calculations show that 0.618 A equals C targets $4.471-4.524. “Should natgas fail to clear $4.418, a retest of the $4.252 low would be possible before the next leg up begins.”

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