Slightly

April natural gas futures managed to hold on to Thursday’s gains and closed slightly higher Friday, although traders are still thinking prices will eventually head back down to the mid $3 area. By the close of trading April futures had risen 1.0 cent to $4.168 and May had gained 1.2 cents to $4.246. April crude oil shed 35 cents to $101.07/bbl.

Continuing on its recent pattern of moving slightly higher or lower within its current “congestion range” as weather forecasts change, February natural gas futures on Tuesday traded between $4.338 and $4.490 before closing the regular session at $4.481, up 8.2 cents from Monday’s finish.

As the 3Q2010 earnings season begins, BMO Capital Markets analysts are predicting that the biggest North American independents will report “slightly higher” cash flow from the year-ago period and double-digit production growth.

Except for flat to slightly higher numbers in Western Canada and El Paso’s Bondad pool, prices continued to slip at nearly all points Friday. Cooling load remained fairly high throughout most of the southern third of the U.S., but that was overcome by forecasts of little more than warm weather in northern market areas, the previous day’s drop of 6.8 cents by September futures and the usual weekend decline of industrial demand.

The modest Midwest warming trend that had helped boost most of the market slightly a day earlier proved to be short-lived, and so did the small rally as prices fell at a majority of locations Thursday.

Although most points continued to drop Monday, mild firmness at several points created a mixed market and indicated slightly more firmness than on the preceding Friday when all points were down. Except for high temperatures with peaks from the mid 90s to the mid 100s forecast for Tuesday from the Southeast through the desert Southwest, most areas were expected to have relatively moderate temperatures around 90 or lower.

Most locations saw small price increases Thursday based on a gain of nearly a dime by futures a day earlier and forecasts of high, though slightly receding, temperatures in much of the U.S.

Pacific Gas and Electric extended a Stage 2 high-inventory OFO on its California Gas Transmission system through at least Thursday, but slightly loosened the tolerance for daily positive imbalances from 5% to 6%.

Raymond James & Associates Inc. last week appeared to take a step on the natural gas bull side as analysts slightly lifted their 2010 forecast for U.S. natural gas prices to $4.50/Mcf from $4.25.