The NYMEX June natural gas futures contract settled 6.9 cents higher at $2.50/MMBtu Tuesday amid supportive fundamentals, sources said.
"The newly established uptrend from the low continues," said PFGBest analyst Phil Flynn, although he indicated that there was "no real decisive bullish news here" to spur prices higher.
Flynn said marketers are expecting early cooling demand, with above-average temperatures poised to cover much of the US over the next couple of weeks. In addition, stronger-than-expected manufacturing data "played into the bulls' hands," he said.
Furthermore, early estimates for Thursday's release of the US Energy Information Administration's weekly gas storage data call for a build well below the average injection for the reporting week. Estimates for the week that ended on Friday expect a build in the 50s Bcf, compared with the five-year-average build of 91 Bcf, according to EIA.
Kilduff Report analyst Mike Fitzpatrick said he expects the market could continue to consolidate in a range of $2.40/MMBtu to $2.50/MMBtu ahead of expiration.
"Rising prices, then, will become increasingly dependent on output cuts significantly greater than those already announced," Fitzpatrick said. "Absent producers' willingness, those will have to come from either hurricane disruptions or pressing storage infrastructure."
The contract traded Tuesday between $2.387/MMBtu and $2.507/MMBtu.
