July natural gas futures closed higher Wednesday in spite of another losing day for crude oil. Traders also ignored the completion of repairs to the Independence Hub production platform in the Gulf of Mexico and elected to focus on expected warm weather in Midwest and eastern energy markets. At the close of floor trading July futures were up 15.8 cents to $12.379 and August added 14.0 cents to $12.442. July crude oil skidded $2.01 to $122.30/bbl.

Late Tuesday Enterprise Products Partners announced the completion of repairs to Independence Hub and presently volumes are flowing at reduced rates during final testing. Full volumes are expected “during the first half of June,” the company said. Prior to the platform’s shutdown it was producing about 900 MMcf/d.

Forecasts for hot, humid weather in key eastern energy markets are keeping the bulls in the driver’s seat. The heat is expected to have its full impact by the weekend, but prior to its arrival areas along a broad cool front were hit with severe winds and thunderstorms. A tornado hit near the offices of Intelligence Press in Sterling, VA, just west of Washington, DC.

AccuWeather.com reported that the surge of heat moving out of the Southwest will move into the Mid-Atlantic region this weekend with high temperatures across much of the East reaching the 90-degree mark. The combination of the sunshine, heat and humidity could drive humidity-adjusted temperatures to 100 degrees in some urban centers, the forecaster said.

Market technicians aren’t worried so much about the weather as they are about price movement. They have a strong sense of how natural gas futures need to trade if the bullish case is going to remain intact. Wednesday’s price activity fell right in line for the bulls. In the next few sessions $11.790 may prove critical.

“For natgas to remain on track for further upside any retreat from Tuesday’s $12.376 high must bottom out and reverse higher by the $11.790 area as 0.618 [retracement] of the $11.430 to $12.376 advance,” said Walter Zimmerman of United Energy in a morning note to clients. If that happens, natural gas will be in a position to test targets up to $12.540 to $13.280, he added.

Bears need a break below $11.430. “To derail the case for new highs natgas needs to break below $11.430 from here as 0.618 [retracement] of the $10.857 to $12.376 rally,” he said.

Weather and technical factors notwithstanding, traders will be keeping a close eye on Thursday’s release of Energy Information Administration inventory data. A Reuters poll of 20 industry observers showed a median estimate of a 103 build. The poll had a tight range, from 99 to 109 Bcf, and will be compared to last year’s 110 Bcf build and the five-year average of 98 Bcf. A similar Bloomberg survey revealed a median estimate from 12 analysts of 102 Bcf.

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