Harnessing the momentum from Tuesday’s 15.3-cent plummet in December natural gas futures, traders continued to probe the downside Wednesday with mixed results. After starting the regular session with a low of $3.733, the prompt month contract reached a high of $3.800 just after 1 p.m. EDT before trimming lower to close at $3.749, down 3.2 cents from Tuesday’s regular session finish.

While temperatures continue to dip in a number of regions across the country, traders will need some sharply lower readings to spur any sort of bullish price revival. As exploration and production companies continue to unveil their third quarter earnings results this week, some of them are making it very clear where their focus lies considering current market and pricing dynamics.

In announcing his company’s continued production focus on oil and natural gas liquids due to the economics, EOG Resources CEO Mark Papa said Wednesday during a conference call with financial analysts that EOG continues “to have zero interest in growing North American natural gas volumes in a $4 environment” (see related story).

Citi Futures Perspective analyst Tim Evans chalked up Wednesday morning’s “further minor price erosion” on low volumes to traders already focusing on Thursday morning’s natural gas storage report for the week ending Oct. 28.

“Estimates of a build in the 75-80 Bcf range are bearish relative to our own estimate for a smaller 59 Bcf gain, which we read as potentially supportive, not because our model is necessarily more accurate, but because the higher the expectation the greater the chance for a bullish miss. There’s a greater chance for a “buy the news” price reaction as well.”

A Reuters survey of 25 market players produced injection estimates spanning from 47 Bcf to 80 Bcf with an average expectation of a 69 Bcf addition. The number revealed Thursday morning will be compared to last year’s date-adjusted 68 Bcf build for the week and the five-year average build of 35 Bcf.

Some analysts viewing the market from a technical standpoint find it difficult to muster any kind of bullish conviction. “Natural gas prices remain oversold and they are still on top of the lower Bollinger bands. We should be buying here, but it is very difficult to do that here,” said Peter Beutel, president of energy consultant Cameron Hanover in Connecticut.

According to Beutel, the weather outlook doesn’t look all that supportive either. “It looks like we will have a colder-than-normal weekend, followed by moderate readings through the next two or three weeks, according to the most recent predictions by independent weather forecasters, the National Oceanic and Atmospheric Administration and the National Weather Service. Of course, no one got this past weekend exactly right until we were much nearer the actual event. Still, we are not going to hold that out against them. We see the reasons to be long but cannot expect long positions to be successful for extended periods.”

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