Front-month natural gas futures put in a new low for the larger down move on Friday as the April contract recorded a $4.540 trade before going on to settle at $4.593, up 1.8 cents from Thursday’s finish but 22 cents below the previous week’s close.

With the 2009-2010 winter heating season now mostly being referred to in the past tense, traders will soon begin taking a closer look at the shoulder season, summer heat and what might be in store on the Atlantic hurricane front.

“From a price perspective, the natural gas futures market doesn’t look that healthy,” said Steve Blair, a broker with Rafferty Technical Research in New York. “We’ve broken down through minor support levels but are just now coming into some more significant numbers. Some good support comes in around $4.400 to $4.440, so we’ll have to see what happens. A break of those numbers — especially on a closing basis — would not be good for the price of natural gas.”

Blair noted that the bulls are facing some tough obstacles in the months ahead. “We’ve got plenty of shale gas going into the pipeline, plenty of production going on as signaled by the rising rig count and more LNG [liquefied natural gas] coming to the United States. All these factors have helped to keep storage withdrawals smaller than what they might have been with the type of heating degree days that we’ve seen. This all helping to put downward pressure on prices. Winter gave us its best shot, but a significant rally failed to materialize.”

As for hurricanes, Blair said price could be in some trouble if the Atlantic fails to produce again. “We got through last year’s hurricane season unscathed, but I’m not willing to bet that we’ll get through back-to-back years quietly.”

Traders were generally pleased with the 8:30 a.m. EST release of employment data by the Labor Department. Expectations had been for February non-farm payrolls to show a loss of 50,000 jobs, a decline from January’s loss of 20,000 jobs. The actual figure came in at a loss of 36,000. The unemployment rate, which declined to 9.7% in January from December’s 10.0%, was expected to rise to 9.8%, but the February rate held steady at 9.7%. Equity markets rose, but energy markets barely noticed. Overnight Standard and Poor’s March stock index futures jumped 4 points after the release of the figures to 1,130.00 and April natural gas futures rose a penny to $4.581. The Labor Department added that it was “not possible to quantify precisely the net impact of the winter storms on these measures.”

Analysts note that underlying strength in the economy is likely to translate into greater natural gas use. “If the economy does improve, we will be using more electricity long before we get more drivers back on the road. Companies will ask employees to stay later or work at home before they make a longer-term commitment to a new hire. As far as we can tell, this means more natural gas being used before it translates into greater gasoline use,” said Peter Beutel of Cameron Hanover.

In spite of some saying that winter weather has been fully discounted, Beutel isn’t quite so sure. “Temperatures are expected to remain on the normal side in the North and across most of the states east of the Rockies, but we are not yet done with either the winter,” or the need for space heating. “Based on these factors, natural gas prices look low to everyone except the large trading funds that are selling gas against oil or something else.”

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