The November natural gas futures contract started its reign much like the October contract finished its own on Tuesday -- quietly, but with a small uptick. The newly minted prompt-month contract traded between $3.903 and $3.980 before closing out the regular session Wednesday at $3.962, up 1.1 cents from Tuesday's close.

Noting that trading was slow on Wednesday, Citi Futures Perspective analyst Tim Evans said it appeared that the November contract is "taking a breather" before setting off on a course of its own.

"We continue to see some potential for a seasonal rally, with prices now somewhat cheaper than they were at this point last year, and with 175 Bcf (5%) less gas in storage as of Sept. 17," he said. "We're looking for a 71 Bcf build in storage for the week ended Sept. 24, but others seem to be even closer to the 67 Bcf five-year average for the period, a natural result that would leave comparisons with past years little changed."

Bentek Energy said it expects the Energy Information Administration to report a 67 Bcf injection, which would bring inventory levels to 3,407 Bcf. Thursday morning's build will also be compared with last year's date-adjusted build of 64 Bcf.

Some of the top analysts see the market vulnerable to declines as long as Atlantic tropical activity fails to hold up.

"We will continue to emphasize a hurricane factor that is now on a downward slope as far as activity is concerned. As a result, the market may need to extract some additional weather risk premium going forward if the forecasts fail to indicate a significant storm event through next week," said Jim Ritterbusch of Ritterbusch and Associates.

The weekly inventory number on Thursday, however, is capable of rattling both bulls and bears, and "we are still leaving open the chance of a counterintuitive response to a possible bullish surprise, and we will also be viewing a neutral number as capable of pushing the newly spot November contract down toward this month's contract lows of around $3.70 in the October futures," Ritterbusch said. He expects a build of 67 Bcf.

With Tropical Storm Nicole expected to batter the East Coast for the remainder of the week, traders must look out into the Atlantic for the next system with the potential to affect Gulf of Mexico energy operations. Besides Nicole, the National Hurricane Center's (NHC) radar was clear Wednesday afternoon with the exception of two tropical waves farther out in the Atlantic. According to the NHC, both waves only had 10% chances of tropical cyclone development over the next 48 hours.

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