Natural gas price bears were on the prowl Thursday as unsupportive storage and other bearish fundamental data combined to send natural gas physical and futures values lower. However, with inventory levels apparently already priced into the market, October futures managed to stage an afternoon rally to go off of the board at $3.498, up half a penny. November futures ended the day’s regular session at $3.567, up 2.1 cents. Most cash deals for Friday delivery were down anywhere from a few pennies to a about dime from Wednesday’s averages.

In addition to digesting the news from the Energy Information Administration (EIA) that a much larger than expected 87 Bcf was injected into storage for the week ending Sept. 20, veteran hurricane forecasting firm Weather Services International (WSI) announced a “significant reduction” to its 2013 Atlantic Hurricane seasonal forecast (see related story).

“With only 30% of the season to go, 2013 has not been particularly memorable so far. Of the nine named storms so far, only two have reached weak hurricane status,” WSI Chief Meteorologist Todd Crawford said on Thursday. “Clearly, the more bullish preseason outlooks have not panned out this year, even with relatively warm tropical Atlantic Ocean temperatures and a lack of an El Nino event. The lack of instability due to warmer temperatures aloft has likely been one of the reasons for the quiet season. For the remainder of the season, we are forecasting six more named storms, three hurricanes, and one major hurricane. Clearly, this may still be too aggressive unless the fundamental background state changes significantly. We hope to learn from this outlier season heading into 2014.”

Looking a little closer at physical gas price action on Thursday, value declines were fairly uniform across the United States. Down in southern Louisiana, the Henry Hub ended up averaging $3.48, down 4 cents, while gas in Chicago at the citygate for Friday delivery remained a little richer at $3.52, down 3 cents.

One of the biggest drops by a single point on the day was turned in by Transco Zone 6 NY, which slid 11 cents to average $3.46. Not to be outdone, and aided by continuing capacity constraint issues in the Marcellus Shale, Tennessee Zone 4-Marcellus packets for Friday delivery came in 18 cents lighter than Wednesday at $1.71.

“The situation remains the same,” said a Northeast trader. “Too much gas is being produced in the region for the current takeaway pipeline infrastructure to manage, so you get these price swings. Some pipe expansion projects have already come online to help the situation, and more are on the table or under construction. We certainly need them.”

These same issues were responsible for record lows at some Marcellus points last Tuesday. On Sept. 17, quotes on Tennessee Zone 4 Marcellus plunged 68 cents to average 36 cents, well below the old low for the location of 69 cents, which was recorded for gas to be delivered on June 18, 2012. Deliveries to Transco-Leidy Line also slumped. The point recorded an all-time low trade of a quarter of a cent last Tuesday before reaching an average of just 34 cents, down 70 cents from Monday, and well below the pricing point’s previous low of 87 cents, which was notched Sept. 13 (seeDaily GPI, Sept. 18).

The damage from last week’s floods in Colorado was not propping up prices in the West on Thursday. CIG declined by a nickel to average $3.21, while Opal came off 4 cents to $3.25. In California, it was more of the same as PG&E Citygate slid 4 cents to average $3.84 and SoCal Citygate dropped 2 cents to $3.63.

Despite production loss from Colorado flooding and some significant late-summer heat in a number of regions last week, storage operators still managed to break industry estimates by injecting 87 Bcf into underground stores for the week ending Sept. 20.

Natural gas futures bears were already somewhat in position Thursday morning as the October contract was trading at $3.453 — a 4-cent deficit to Wednesday’s $3.493 close — prior to the fresh storage data. However, immediately following the bearish 10:30 a.m. EDT report, the contract probed even lower, bouncing off of support at $3.402, the lowest value that a front-month futures contract has seen in five weeks.

Heading into the EIA report, the range of expectations was pretty wide, but apparently not wide enough to include the actual build. Bentek Energy came the closest with its 86 Bcf injection estimate, while a Reuters survey of 22 market participants created a range of expectations from 61 Bcf to 83 Bcf with an overall consensus estimate of a 76 Bcf build. Citi Futures Perspective analyst Tim Evans was on the record with a 61 Bcf addition.

“The build of 87 Bcf was at the top end of the range of market expectations and more than the 75 Bcf five-year average, a clearly bearish result,” Evans said. “As this came on the heels of a smaller-than-expected build in the prior week, there’s some possibility of some timing issues between the two reporting periods. Nonetheless, this was a sharp build in a week with warmer-than-normal temperatures and production losses due to flooding in Colorado, and a clear bearish surprise.”

The actual 87 Bcf build also was considerably larger than last year’s date-adjusted 80 Bcf addition for the week.

As of Sept. 20, working gas in storage stood at 3,386 Bcf, according to EIA estimates. Stocks are now 179 Bcf less than last year at this time but 30 Bcf above the five-year average of 3,356 Bcf. During the week, the East Region injected 54 Bcf, while the Producing Region injected 25 Bcf and the West Region added 8 Bcf.

The Producing region’s salt cavern storage figure increased for the week by 8 Bcf to 267 Bcf, while the non-salt cavern figure rose by 18 Bcf to 859 Bcf. The EIA first split Producing Region facility types in storage report footnotes in March 2012 in an effort to give analysts and industry more comprehensive information on the relationship between natural gas inventory changes and types of storage facilities.