Slipping

After threatening for most of the morning to punch below the $6 mark, August natural gas futures rebounded from near its previous $6.025 low to settle at $6.155, up 3.7 cents on the day.

For the third time in the last four Thursdays, the natural gas futures market rallied higher following the release of surprisingly bullish storage news (164 Bcf withdrawal). And while bears are not ready to throw in the towel just yet, analysts and market-watchers agree that it is becoming easier to make the case that prices could move higher from current levels.

Barring a surprise outbreak of increases in productivity, Canadian natural-gas exports to the United States are headed for a second straight year of slowing down.

After slipping lower Wednesday morning in concert with weaker crude oil futures, the natural gas futures market stair-stepped higher in the afternoon to post a positive close for the session. Although slight, the 0.8-cent advance was the fifth-straight daily advance for the November contract. It finished at $5.148, up nearly 60 cents from last Thursday’s $4.565 low.

After gapping lower for the second session in a row and reaching a new two-week low, natural gas futures rebounded at the close Wednesday amid a wave of expiration-day short-covering. The June contract initially dipped into the $5.70s early Wednesday, but a short-covering rally ended up boosting the contract to a final settlement of $5.945, up 4.5 cents for the session and 74.5 cents above where June began its tenure as prompt contract a month ago. Comparatively, May 2003 closed 82.2 cents lower at $5.123.

The third time was a charm yesterday for bulls in the natural gas pit. After slipping lower Tuesday and Wednesday after two straight higher opens, gas futures added to early gains Thursday as traders rallied amid bullish weather news and technical factors. Gains were almost uniform across the front months, with summer strip advancing 24.3 cents to close at $5.502. The May contract, meanwhile, was 24 cents stronger at $5.422.

Prices failed to maintain the upward momentum that had begun theweek, slipping lower by a nickel to a dime at nearly all pointsTuesday. Traders were unable to ignore the cumulative negativedemand effect of more than 40 cities setting all-time hightemperature records for the month of November over the previousweek. And although one marketer said the screen had little bearingon day-to-day cash pricing, the nickel-plus drop in futuresprovided no support for cash.

After slipping more than a dime Thursday, the futures marketcontinued lower Friday morning as traders continued the process oflightening their long positions. The July contract carved out a$2.325 low before 11 AM. That, however, was about all the sellingpressure the market would tolerate and scaled down trade buyinglifted the market throughout the rest of the day. July finished at$2.378, up 2.3 cents. Estimated volume was light, with only 45,070contracts changing hands.

After slipping 2.5 cents Tuesday, the May natural gas futurescontract climbed back up to just below stubborn support at $2.19yesterday in tenuous trading ahead of the release of the AmericanGas Association (AGA) storage report. May finished the session up 3cents to $2.174.