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Snow Seen in Rockies; November Called Flat

November natural gas is set to open flat Thursday morning at $2.40 as prices consolidate ahead of government inventory figures and early snow is in the forecast for higher elevations in the West. Overnight oil markets gained.

Analysts attempting to figure out Thursday's storage report don't see a definitive trend. "It's a mixed bag," said John Sodergreen, editor of Energy Metro Desk (EMD). "Our early view report from last Friday came in at 87, and the median was 85. The range was 80 to 95 Bcf. This week our EMD Consensus came in at 86 while the Survey Index (average of the top six surveys) was a little higher at 88. The range this week is 80 to 96 Bcf. The Street seemed comfortable with this upper-80s neighborhood and even a bit higher."

The marquee level of 4 Tcf is in sight. Current inventories stand at 3,733 Bcf, and with three weeks remaining in the traditional injection season, 89 Bcf needs to be injected weekly to make the mythical mark. Can't quite make 89 Bcf? Add a few mild weeks at the beginning of November and it's a piece of cake.

Last year, a stout 94 Bcf was injected, and the five-year pace stands at 86 Bcf. For the week ended Oct. 16, analysts at First Enercast calculate an 83 Bcf increase, and a Reuters poll of 26 traders and analysts showed a mean of 88 Bcf with a range of 82 to 95 Bcf. Bentek Energy's flow model is figuring on an increase of 82 Bcf, and the firm said the somewhat lower number is due to increased power burn.

"Power burn demand was the largest mover on the week, increasing to average 26.3 Bcf/d during the week, up more than 1.5 Bcf/d week over week," it said. "The robust power burn demand was driven by low natural gas prices combined with mild temperatures."

Daily gas buyers will be on their toes as short-term weather is definitely giving hints of winter cold to come. "[A] cold front will move across the northeastern U.S. [Thursday], with showers possible along and ahead of the front. The front will move offshore tonight, generally bringing an end to the precipitation, although a mix of rain and snow showers may linger into Friday morning across portions of northern New England," the National Weather Service said in a Thursday morning report.

"Farther west, scattered showers and thunderstorms will be possible from the Four Corners region into the central Rockies. Temperatures will be cold enough in the higher elevations of the Colorado Rockies for precipitation to fall in the form of snow, where 2 to 8 inches is possible."

In overnight Globex trading December crude oil gained 74 cents to $45.94/bbl and December RBOB gasoline added 3 cents to $1.3120/gal.

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