Natural gas prices made modest gains in most North American markets Thursday, surprising most sources polled by NGI, who pointed to continued bearish fundamental factors and a futures market that showed little sign of rebound.

The notable exception to the downward price trend was the Northeast, a region bracing for the arrival of Hurricane Earl and cooler temperatures associated with the expected storminess. The release of fresh storage data was perceived as a neutral news event Thursday, said sources who agreed that the 54 Bcf injection, though larger than recent weeks, was well within market expectations (see related story).

“The cash market was pretty strong overall. We were wondering why because there wasn’t really a market,” said a Midcontinent trader. “A lot of the markets were already subscribed, industrial users weren’t buying as much, and we didn’t have as much power generation demand.”

He noted that the only thing on the day that stood out was the Mariner Energy rig fire offshore Louisiana (see related story). “The strength we saw Thursday could be tied in part to the rig fire,” he said. From a regulatory standpoint, that couldn’t have happened at a worse time as people are now just getting over the whole Deepwater Horizon debacle.”

Commenting on the overall weakness of gas markets in his region, one Northeast trader said it’s no wonder considering the current fundamentals.

“Storage is basically full. I don’t think anyone across the country is scrambling to locate their winter gas. On top of the conventional supply of gas, the unconventional sources like the shales continue to multiply. That gas is flooding the market, so supply is high. I hate for it to sound so simple, but it’s basically a situation of supply and demand. The supply is there and growing and the demand continues to be muted in this economy. Even with the very hot weather we had this summer, prices did not go screaming higher. Values were held in check because we had the supply on hand to cover the situation.”

He added that the lack of storm activity in the Gulf of Mexico isn’t really affecting prices one way or the other. “Gulf production is not what it used to be for the U.S. supply picture,” he said. He added that five to 10 years ago traders hung on every turn of a storm, but with all of the shale gas development onshore, that is no longer the case.

A storm would still have to get into the Gulf of Mexico to reveal how much effect it would have on the market. According to current forecasts, that is not a threat over the next week.

While Hurricane Earl was expected to batter the Outer Banks Thursday night on its way up the East Coast, senior meteorologist Kristina Pydynowski was quick to note that a “tropical parade” is currently under way that includes Tropical Storm Fiona and Tropical Depression Gaston.

She said the development of Fiona, located north of the Caribbean Islands, will likely be hampered by the wind shear left in the wake of Earl. She expected Fiona will likely begin a more northeasterly route on Friday.

Gaston, which formed on Wednesday over the eastern Atlantic, will likely also spare U.S. interests, according to Pydynowski. “Gaston currently poses no danger to land,” she said. “That will remain the case as Gaston heads westward through the central Atlantic into at least Monday, eventually strengthening into a hurricane. While the exact track of the storm is far from etched in stone, current computer models suggest Gaston will either directly target the islands or follow the same path of Hurricane Earl around the middle of next week.”

Looking ahead to the 2010-2011 winter, the Northeast trader noted that parts of the East are forecast to experience some significant cold. “We could see some pretty chilly temperatures, but if the market’s lack of response to this summer’s heat is any indication, it’s going to take an awful lot of extended freezes to get natural gas to even take notice,” he said.

The just-released 2011 edition of the Farmers’ Almanac paints New England as frigid cold this winter (see Daily GPI, Sept. 1).

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