Softer cash prices ahead of the weekend and forecasts suggesting there will be little additional weather-related demand this week were enough Friday to put the kibosh on any chance for a short-covering rally in natural gas futures. With that the May contract completed its penultimate trading day in an exceedingly lackluster session that featured a razor thin 4-cent trading range. It closed at $5.477, up 0.3 cents from Thursday’s close.

Heading into Friday’s session, bull traders were hopeful that short-covering would be the name of the game following last week’s 35-cent retrenchment off Monday highs. However, with the May contract set to expire Monday, buyers were reticent to over-commit ahead of the weekend.

The physical market was also a wet blanket on the futures market Friday as cash prices sunk amid slackened weekend demand. NGI’s Henry Hub price sank 9 cents to average $5.38 Friday, its lowest level in more than a week.

Looking ahead, demand may not pick up any time soon as true summer heat has yet to arrive. According to the latest six- to 10-day forecast released Friday by the National Weather Service, above normal temperatures are expected over a large swath of the eastern United States. However, market watchers are quick to note that above normal temperatures in April don’t have the same impact as above normal temperatures in July, and that gave the futures market the option of doing nothing Friday.

Another reason for the lack of volatility is that traders are taking a wait-and-see approach ahead of this Thursday’s storage report. With the market being whipsawed back and forth by successive weekly storage reports showing a 48 Bcf draw and then a 61 Bcf injection, observers are anxious to see what the next data set will show. Early indications are that there will be an injection somewhat lower than last week’s report.

“The outlook for [this] week’s DOE storage report is neutral to bearish, with an early 45-55 Bcf injection estimate exceeding the 31 Bcf refill from last year, but a near match with the 47 Bcf five-year average for this time of year,” wrote Tim Evans of IFR Pegasus in New York. Meanwhile, Kyle Cooper of Citigroup confirmed that estimate by calling for a refill in the mid 40s (Bcf).

In daily technicals, Evans sees support for June futures at Thursday’s low of $5.45 ahead of more buying possible in conjunction with 50% Fibonacci retracement at $5.42. On the upside, minor resistance exists at $5.62-65, with additional opposition at $5.80-82 and then at last Monday’s high of $5.91, he reasoned.

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