The natural gas market has been surprisingly strong of late, even in the face of milder temperatures and relatively high levels of gas in storage (1564 bcf as of last Friday according to the EIA"s release today). The May contract went off the board today at 7.508, just a nickel under the April settlement, and four cents under March. Arguments for the contract staying up here range from an anticipated active hurricane season, to nuclear maintenance that will fuel demand for natural gas as an alternative in electricity generation, to increased demand in ethanol production, to declining imports from Canada (blamed in part on high levels being consumed in the oil sands project) but in my opinion the market is ignoring the underlying fundamentals, which in the short term I view as bearish. One explanation I have heard offered is that the cash market has been very strong and it has has been suggested that this too has helped prop up the screen....but why such cash strength? Longer term I am more bullish, but due to current and anticipated mild weather, record LNG imports (the UK market is around 3 dollars compared to our 7.50 market) and storage in the ground that is 233 bcf over the 5 year average, over the next few weeks I anticipate a rather hefty selloff, at least down to the low 7.00 area if not 6.80 or even the mid 6 dollar range. I wondered what others could offer for forecasts or rationale as to why the June contract might be trading at such a historically inflated level given the current outlook, or perhaps even offer technical explanations for where we are currently trading and where we might be headed.