After wildly carving out a 15-cent trading range in the moments following the 10:30 a.m. EDT storage report (featuring a 75 Bcf injection), the natural gas futures market continued to march higher Thursday, proving that rising storage inventories are no match for the one-two combination of concerns over winter and bullish technical factors.

After stair-stepping higher throughout the late morning and afternoon, the November contract surged 12 cents in just five minutes to notch a new two-month high at $5.57 in a rash of market-on-close buying. It settled at $5.494, up a whopping 34.6 cents for the session.

According to the Energy Information Administration, 75 Bcf of gas was added to underground storage facilities last week, bringing working gas levels to 2,863 Bcf as of Oct. 3. Though down 25% from the string of approximately 100 Bcf weekly injections notched through the month of September, last week’s 75 Bcf refill was considered statistically bearish as it fell near the top of the 60-78 Bcf range of market expectations.

It was also price-negative versus historical figures, easily eclipsing the five-year average build of 57 Bcf and last year’s paltry 42 Bcf addition. At 2,863 Bcf, storage now lies just 37 Bcf less than the five-year average and 217 Bcf less than last year at this time. With four weeks left in the typical April through October injection season, storage injections need only to average 34 Bcf a week from now through Nov. 1.

However, the market turning higher on seemingly bearish storage data is nothing new. A week ago the market was able to shrug off a record-setting 100 Bcf refill to move modestly higher for the session. Market-watchers agree that surpassing the 3,000 Bcf level in storage has been a foregone conclusion for some time. What matters now, they contend, is the weather this winter, which is guilty of being bullish until proven otherwise.

That indictment gained some support Thursday with the release of a bullish six- to 10-day forecast. According to the National Weather Service, below normal temperatures are predicted for the entire eastern half of the country for the Oct. 15-19 time frame. That will be contrasted sharply by above-normal temperatures in the western third of the country. Because above-normal temperatures in the West in October typically translate into cooling demand, the forecast is a price-supportive double whammy.

Also of note to weather watchers Thursday was the further development of a well-organized tropical wave in the eastern Caribbean Sea. The National Hurricane Center said Thursday it would continue to monitor the system, which could strengthen into a tropical depression Friday or Saturday.

However, as is often the case in natural gas futures, the fundamentals turn the market’s steering wheel and technical factors put the pedal to the metal. “The [non-commercial] fund traders are right now are the proverbial bull in the china shop,” said Ed Kennedy of Miami-based Commercial Brokerage Corp. “We have had two [daily] settles above the [November] 40-day moving average and they are covering their shorts.”

Having witnessed the market blow through one level of potential resistance at $5.47, Kennedy now sees the potential for the market to trade up to the next area of expected selling at $5.73. Resistance there, he continues, is consistent with a Market Profile [software] 100% extension above the $4.69-$5.21 trading range etched Monday and Tuesday.

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