In what several traders noted was a quiet session as far as Thursdays go, natural gas futures chopped sideways yesterday as storage-related selling and weather-related buying were evenly matched.

Aside from the quick, 15-cent swath cut just following the release of fresh storage data (81 Bcf injection), volatility in the gas pit was virtually non-existent Thursday, backing the assertion that the market is fairly priced at current levels. November finished at $5.411, down 2 cents on the day.

According to the Energy Information Administration, the 81 Bcf weekly build brought storage levels to 2,944 Bcf on Oct. 10. Not only was the injection larger than the 48 Bcf added during the same week last year and the five-year average refill of 51 Bcf, it also eclipsed last week’s 75 Bcf increase. Storage is now just 8 Bcf less than the five-year average — a remarkable feat considering the deficit loomed as large as 600 Bcf this spring.

Expectations had centered on a 70-92 Bcf injection, and an informal poll of industry sources by NGI on Wednesday yielded an average refill expectation of 83 Bcf. With three weeks left in the typical storage refill season, storage needs to average just 52 Bcf/week in order to reach the 3,100 Bcf level by Nov. 1. Generally speaking, ending inventories of 3,000-3,200 Bcf constitute “full storage” heading into the winter heating season.

“The market has decided to ignore the bearish storage data,” noted George Leide of Rafferty Technical Research in New York. “[Traders] are more concerned with the possibility — not probability — that this winter will be a repeat of last winter and will draw heavily on inventories.”

Although last winter started with a hefty 3,172 Bcf of gas in storage, the market was hit with unseasonably cold weather, forcing record-setting storage draws. By the middle of March, storage had fallen to a record low 636 Bcf, proving once again that natural gas is a weather-driven market.

Heading into the upcoming heating season, there is little consensus on what type of weather to expect. In addition to the loss of popular private forecasters Jon Davis and Mark Russo who left Salomon Smith Barney this summer, the industry is getting little insight from governmental weather services. The National Oceanic and Atmospheric Administration held a press conference Thursday to release its much anticipated winter forecast. However, like a crystal ball reader lacking clarity, NOAA said that much of the country has “equal chance” of seeing above-normal, below-normal or normal temperatures (see related story).

In technicals, Leide is bearish in the near-term and looks for the market to test key support at $4.91-95 either this week or next. Accordingly, he advises his clients to be short, preferably from the high $5.40s. A buy-stop liberally placed at $5.65 would protect his position. In the longer-run, however, Leide admits higher prices are likely and looks for a break of $5.80 to prove his point.

While agreeing that in the short-run, the correction lower still has potential, Tom Saal of Commercial Brokerage Corp. in Miami also sees the market’s calm demeanor Thursday as an indication of a market that is fairly priced. “The winter strip settled at about $5.70 [Thursday], which is about 10 cents above the average of last winter’s settles. At least for now, it appears that the market is expecting another cold winter and has priced that expectation into the market.”

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