Increasingly muddled technicals and fundamentals played to a stalemate Wednesday as natural gas futures traders failed to propel prices very far from the $5.00 mark. At the closing bell, the front months made small advances while the winter 2003/04 strip ebbed slightly. April finished at $5.097, up 2 cents for the session on its penultimate trading day. May, which will take over as prompt month when April goes off the board Thursday, notched a 3-cent gain to close at $5.147.

With storage numbers set to be released at 10:30 EST Thursday, many traders elected to wait on the sidelines Wednesday. That may be a smart move, considering the lack of a clear consensus on the what the report will show. Predictions call for the Energy Information Administration to report anywhere from a 47 Bcf withdrawal to a 45 Bcf injection. Market watchers agree that because storage is already at such depleted levels (636 Bcf as of March 14), the uncertainty cannot be understated. A draw of 36 Bcf or more could put the $5.50 area solidly in bulls’ sights. Alternatively, a injection of 20 Bcf or more might compare bearishly versus the 75 Bcf year ago withdrawal as well as the 59 Bcf five-year average.

On the technical side of the market, the answer is not much clearer. While still narrowly above the uptrend line on the weekly continuation chart, the market has broken beneath support on the April daily chart. “[Tuesday’s] decline below the $5.08 support opens the door for the decline to reach the $4.77-80 support area, wrote Craig Coberly of Atlanta-based GSC Energy in a note to customers Wednesday morning. However, he was quick to couch that statement, adding that the rather lethargic price action shown the past few days suggests prices may drift down to this area rather than suddenly drop lower. Daily stochastics, Coberly said, portray a very oversold market. “This implies gas is nearing a low. Skip to the May contract, and the analysis favors the bulls even more as May has yet to break beneath the psychologically important $5.00 level.

On the upside Tim Evans of IFR Pegasus in New York points to May’s 5.03 low Wednesday as a sign that the market is in the act of forming a rounded bottom. “On the upside, expanding [Wednesday’s] range past $5.16 points to the recent mid-range highs at $5.305-331 as a decision point, with reversal above that cap putting pressure on the $5.464 pivot line and prior highs at $5.55 and $5.598 in turn,” he wrote Wednesday afternoon.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.