With one eye on the tropical disturbance in the Caribbean and the other focused on Thursday’s storage report, natural gas futures traders took a wait-and-see approach to the market Wednesday. The result was choppy, sideways-to-lower trading. The September futures contract failed to retest the $5.28 high achieved in the overnight Access trading session Wednesday, paving the way for light long liquidation. It closed at $5.179, down 3.8 cents for the session.

While it appears certain that southern Florida will have a wet and windy conclusion of the work week, it will take a couple days to know what impact the storm will have on natural gas production in the Gulf of Mexico. Weather 2000 delineates two distinct possibilities for the storm’s future. “The first, is pre-Florida chapter where the lack of a closed circulation and land-interaction would hold this storm at bay. The 2nd chapter could be the post-Florida, Gulf of Mexico stage of the storm, where minimal shear, ample super-warm Gulf waters, and a long ‘run-way’, would all make for a potentially much more explosive scenario,” the group continued.

Though now in the spotlight, the storm will take a back seat to fresh storage data set to be released Thursday morning. While expectations are for a robust 65-75 Bcf refill, don’t be surprised if a slightly lower-than-expected figure prompts another running of the bulls. “What possible difference does [one] or two Bcf here or there make?” asks Jay Levine of New Hampshire-based Advest Inc. “Plenty, if it’s the fickle world of energy trading, [where] technical and psychological influences often upstage fundamental analysis.” Levine pointed to the 34-cent rally last week following the only slightly lower-than-expected 74 Bcf injection.

Kyle Cooper remains bearish on prices and notes that even a 64 Bcf build would exceed the five year average by 25%. Last year at this time, the market only injected 53 Bcf. In 2001, the refill during the same week were a paltry 46 Bcf. Storage figures will be released at 10:30 a.m. EDT.

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