Cool breezy weather across much of the nation, new predictions of a weak hurricane season and expectations of another relatively large storage injection despite last week’s record heat were some of the major fundamental factors that helped the bears pressure the September gas futures contract down 5.6 cents Wednesday to $2.660.

After the slight rebound Tuesday, the futures market returned to a downtrend mode Wednesday with local sellers pushing September down to only two cents off its daily low of $2.640 and five cents from its high of $2.710.

“It was a quiet uneventful day. The locals were trying to push it down even lower, but it looks like we could be rangebound for a while unless the storage report is a big surprise tomorrow,” said a broker.

Temperatures fell several degrees in most regions and the cool weather is expected to continue Thursday. Meanwhile renowned hurricane forecaster Dr. William Gray of Colorado State University downgraded his tropical season forecast for the second time this year. Cooler Atlantic water temperatures and stronger winds in the tropical Atlantic basin are expected to keep this season’s hurricane numbers down. Gray now predicts nine named storms, and says four will develop into hurricanes. One of those will strengthen to a major hurricane — Category 3 or stronger. Those numbers were slightly higher in Gray’s previous forecast.

If his latest predictions are correct, then the 2002 Atlantic tropical season will end below average. In an average year, nine tropical storms are named, and five develop into hurricanes, and of those hurricanes, two reach Category 3 strength. So far this year, three tropical storms have formed: Arthur, Bertha and Cristobal. None have intensified to hurricane strength.

The weakness in the petroleum complex Wednesday also may have put downward pressure on natural gas futures, but it also may make the market more vulnerable to short covering if the Energy Information Administration reports a lower than expected storage injection on Thursday, said one futures analyst. Estimates for storage injections during the week ending Aug. 2 have ranged from 20 Bcf to 60 Bcf with most between 45 and 50 Bcf. The industry injected 75 Bcf during the same week last year, and the five-year average of injections for the week is about 54 Bcf.

However, the National Weather Service reported 102 cooling degree days last week, making it one of the hottest weeks on record. In addition, cash prices surged to a peak of $11/MMBtu at the New York Citygate last week, creating a major incentive for local utilities to withdraw gas from storage, sell it on the market and plan to replace it later with cheaper supplies.

If the storage numbers come in on the low side of expectations, several analyst said they believe the September contract will test resistance at $2.745, $2.80 and then $2.85-87. If the market can get that far, a rebound to the $3.02 to $3.099 highs of the past few weeks would be back on the agenda for consideration.

The September contract’s new low at $2.64 replaces the weakly established $2.67 level and now may allow the market to slip into the $2.50s, according to some observers.

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