The NYMEX May natural gas futures contract bounced above the $4/MMBtu mark early Friday on heavy volume as traders continued to digest Thursday's bullish storage data, sources said.
As of 10:12 a.m. EDT (1412 GMT), the contract was trading at $4.05/MMBtu, up 10.3 cents from Thursday's close.
The US Energy Information Administration estimated a sizeable draw of 94 Bcf for the week ended March 29 and many are looking for EIA to report another withdrawal for this week, with early indications calling for a pull between 15 Bcf and 20 Bcf.
"Yesterday's storage report was obviously a little higher than expected," said Tom Saal, a broker with INTL FC Stone. "Folks had a day to think about it and realized it was a pretty bullish number this late in the season. The market finally digested it, and it knocked some weak shorts out."
Gelber & Associates analyst Aaron Calder added that "fundamentals are pretty murky right now," with production starting to edge lower while demand for electric generation and industrial demand is "creeping up."
He said the market could potentially test $4.25/MMBtu on the upside. The contract has traded so far between $3.93/MMBtu and $4.068/MMBtu.
