The natural gas futures market on Wednesday continued to limp back from the long holiday weekend as another round of light trading in the October contract produced a 14-cent range on the day before closing the regular session at $3.940, up two-tenths of a penny from Tuesday’s finish. The November contract followed suit with a 0.2-cent gain to close at $4.045.

Of interest to some traders is that the prompt-month contract briefly ventured north of $4 two separate times during the session. October futures reached a high of $4.038 in morning trade.

Coming as a surprise to some, the natural gas futures arena remained quiet despite a tropical disturbance swirling over the Bay of Campeche and fresh storage data on the horizon. According to the National Hurricane Center (NHC), a broad area of low pressure was churning the waters of the southern Gulf of Mexico. Forecasters said the system was becoming more well organized as the afternoon progressed, and early Wednesday evening the disturbance strengthened to become Tropical Storm Nate.

Much farther west, Tropical Depression 14 was upgraded to Tropical Storm Maria as it moved westward across the tropical Atlantic. The NHC said it did not anticipate any near-term significant strengthening.

However, with the ramped-up development of shale gas over the past few years, some question whether a tropical storm or a hurricane in the Gulf of Mexico could really impact natural gas supplies enough to create a meaningful price spike. An example occurred last Friday. With Tropical Storm Lee parked in the Gulf of Mexico and production platforms shut in, October futures declined 17.8 cents.

“I think it is clear that the Gulf’s influence on the U.S. gas supply picture has changed with the arrival of shale gas,” said a New York trader. “Less than 10 years ago, even the threat of a hurricane in the Gulf could move natural gas prices by dollars. Now, I believe we would need to see some significant damage and extended shut-ins for the market to really take notice.”

Turning attention to Thursday’s storage report for the week ending Sept. 2, it appears that the industry is looking for an injection from the mid 50s Bcf to low 60s Bcf. A Reuters survey of 17 traders and analysts produced a 40-80 Bcf range of estimates with an average expectation that 61 Bcf will be added for the week.

The number revealed Thursday morning at 10:30 a.m. EDT will also be compared to last year’s date-adjusted build of 57 bcf and the five-year average addition of 63 Bcf.

Those seeking to take advantage of the market’s apparent lack of direction are nonetheless watching September trading closely. “On a trading basis, we still feel the highest probability is that we continue to trade the high $3 to high $4 range. But we are going to be closely monitoring our positions during the month of September,” said Mike DeVooght, president of DEVO Capital, a Colorado-based trading and risk management firm.

“Oftentimes September can be a weak month for gas prices. On a trade basis, we continue to use rallies into the mid to high $4 level as a selling opportunity, primarily utilizing collars and selling call premium. If we break back under $4.15, we will book profits on the short calls and sell put premium. Not exciting, but the best way (in our opinion) to trade this market until we get a break of the range.

“We will continue to hold our current collars and will look to sell calls and cover our short puts if we trade back above $4.60-4.70 or sell puts if we break below $4.15,” he said. “If we break below $3.85, we will roll our short $4.00 puts to $3.85.”

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