Upside

Natural gas futures reversed direction again on Wednesday — this time to the upside — on short covering by local traders ahead of Thursday’s release of fresh storage data. With Wednesday’s 6-cent advance, the July futures contract remained unable to register a back-to-back daily increase or decline for more than a week. It closed at $5.757, close to the middle of its recent $5.46-6.12 trading range.

Natural gas futures exploded to the upside Tuesday morning as traders reacted to private weather forecasts suggesting the December thaw will be short-lived, and temperatures will return to below normal by the end of the month. After gapping higher at the opening bell, the market was quickly whisked above recent highs by buy stop-loss orders positioned in the mid to upper $4.40s. The January contract finished at $4.636, up 27.7 cents for the session and within easy striking distance of six-week contract highs at $4.66.

While Capitol Hill’s legislative schedule has been turned upside down in the wake of last week’s terrorist attacks, the Senate Energy and Natural Resources Committee still expects to mark up and vote out a comprehensive energy bill this fall, an aide to the committee said.

After checking higher yesterday morning, natural gas futures made another push to the upside early in the afternoon as traders digested the latest natural gas storage supply data. The October contract received the biggest boost, shuffling 6.1 cents higher to close at $2.420.

With little in the way of fresh fundamental or technical impetus, natural gas futures drifted sideways and lower Tuesday as traders elected to wait for a clearer supply-demand picture to develop. The September contract remained within an extremely tight 5.5-cent range, well beneath Monday’s gap lower open, but safely above support in the $3.03-10 area. At the closing bell, September was 1.7 cents weaker at $3.17.

After testing both the upside and the downside during the firsthour of trading, the futures market chose the middle road yesterdayas many traders waited on the sidelines ahead of the weekly storagereport. As a result, the November contract did not stray very farfrom center and finished the session up 1.5 cents at $2.601.

After a brief and uninspired upside push was thwarted, naturalgas futures continued lower yesterday as follow-through sellingtook prices to their lowest level since April. No fresh news wasseen influencing prices, and as a result bears remained solidly incontrol, traders said. The August contract finished down an evennickel at $2.141.

Cash prices hinted Thursday that they’re not ready to settleinto the same kind of stagnation period that characterized much ofFebruary’s activity. Riding the momentum of a rising Henry Hubfutures contract, stronger crude oil futures (back over $13/bbl)and snowy weather in various regions, nearly all points roseanywhere from 2 cents to a dime with most increases in the vicinityof a nickel.