Pressured lower by weaker crude oil futures along with a saggingphysical market, natural gas at the New York Mercantile Exchangewas softer Thursday with buyers on the sidelines, unwilling to addto their already hefty longs. After chopping lower for most of thesession the October contract received a late boost on renewedhurricane fears. However those late gains were more than offset byearly losses and that left the prompt month in negative territory,off 3.1 cents at $5.287 at the close yesterday.

While few if any supply disruptions are expected from its 65-75MPH winds, tropical storm Helene burst onto the scene yesterday andprompted traders to cover shorts late in the session. Traders werein agreement that without the storm’s influence, October would haveretraced back into the $5.10s.

For Tom Saal of Miami-based Pioneer Futures, yesterday’s selloff was expected considering the extremely overbought conditionsthat existed Wednesday. “Twice we failed get through the $5.38level. It was only natural for the market to test the downside. Nowwe have a game of chicken. The longs have watched their profitserode for two days now. It will be interesting to see if they canstomach another down-day.”

While Saal admits that the move lower has alleviated theoverbought conditions, he cautions that the selling could increaseexponentially on a break back into the teens. “There are definitelysome sell stops waiting below $5.20,” he said. They tried to pushit there today, but Helene spoiled their plans.”

Although more symbolic in nature than an actual market mover,the first snow of the season was fell overnight in the NorthernRockies to usher in the first full day of Autumn. Looking ahead,below normal temperatures are expected through the end of the monthacross a large swath of the country extending from the PacificNorthwest across the Northern Plains to include the Great Lakesregion.

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