The NYMEX June natural gas futures contract remained in modestly positive territory midday Thursday after the US Energy Information Administration released a storage report that most market players deemed neutral.
As of 12:30 p.m. EDT (1630 GMT), the contract was trading at $4.222/MMBtu, up 3.6 cents from its close on Wednesday.
For the week that ended on Friday, EIA reported a build of 89 Bcf, which compared with consensus estimates for an addition between 90 Bcf and 94 Bcf.
Some traders dismissed the storage data and instead cited support for the slight rally from the weather outlook. The US National Weather Service anticipates above-average temperatures for the eastern two-thirds of the US in its six- to 10-day and eight- to 14-day outlooks.
"The current weather forecasts look supportive, but market participants aren't sure how much a switchback to coal will hamper cooling demand," said Gelber & Associates analyst Aaron Calder.
He noted that the contract may test resistance at around $4.23/MMBtu, but if that level is not definitively broken, "it would signal to the market that the recent rally has fizzled."
The contract has traded so far between $4.159/MMBtu and $4.248/MMBtu.