Caught

While last week’s bearish storage report caught traders off guard, this week’s report of a 42 Bcf injection for the week ended July 22 was a little more in sync with expectations, especially considering last week’s oppressive heat and minor Gulf production shut-ins due to Hurricane Emily.

Caught between longer-term bearish fundamental market conditions and shorter-term bullish technical factors, the natural gas futures market chopped sideways to higher in relatively light trading activity Tuesday. And while neither side could claim the day as a victory, the market finished on a positive note, with the June contract ekeing out a 3-cent advance to close at $6.476.

Caught in a mix of short-covering and a delayed reaction to supportive storage news released Thursday, the natural gas futures market turned modestly higher Friday to break the string of losing sessions.

Caught between the bullish euphoria surrounding gains in the nearby crude oil pit and the bearish reality of its own short-term fundamentals, the natural gas futures market shuffled quietly sideways Friday. On the technical side of the market the bag was similarly mixed as Friday’s closing prices rang bearish on the daily chart, but bullish on the weekly chart.

Caught between short-term weather/storage bulls and long-term bears betting against another price spike like spring 2003, the natural gas futures market chopped quietly sideways to close out the week.

After looking a little like a deer caught in the headlights in the minutes immediately following the storage report (78 Bcf injection), the natural gas futures market bolted higher Thursday as technical market features trumped an increasingly bearish storage situation. The September contract carved out a new, one-month high at $5.34 by 11:30 a.m. ET, and then slid back a few cents in the afternoon to close at $5.275, up 15.6 cents for the session.

With one eye on the tropical disturbance in the Caribbean and the other focused on Thursday’s storage report, natural gas futures traders took a wait-and-see approach to the market Wednesday. The result was choppy, sideways-to-lower trading. The September futures contract failed to retest the $5.28 high achieved in the overnight Access trading session Wednesday, paving the way for light long liquidation. It closed at $5.179, down 3.8 cents for the session.

Cash prices caught their second wind Wednesday, with across-the-board gains between a dime and a little more than 20 cents generally representing larger increases than those on Tuesday. Storage buying, making up for nuclear plant outages and a slow rebuild of air conditioning load across the South following a cooler-weather dip earlier in the week were again cited as factors in the run-up.

Natural gas futures were caught in choppy trading action Thursday morning as bullish storage data met head on with the market’s seasonal propensity to move lower in the first quarter of the year. After an initial dip failed to attract much follow-through selling, buyers managed to support the market throughout the rest of the session. March finished at $6.162, up 2.8 cents for the day.