Wrapping up a wild week of price swings, November natural gas futures on Friday pushed lower as the potential storm threats in the Gulf of Mexico and the Atlantic continued to show no interest in strengthening. The prompt month traded between $7.060 and $7.320 before closing out the week at $7.073, down 33.9 cents on the day but 20.3 cents higher than the previous Friday’s close.

The week’s range was 68 cents from a low of $6.790 to a high of $7.470, with gains recorded on Monday, Tuesday and Thursday and losses logged on Wednesday and Friday. Adding to the contradictory signals of the week was Thursday’s storage report and the week’s storm talk. Whether traders were bullish or bearish, everyone seemingly had something they could key on during the week in the natural gas futures market.

While the Energy Information Administration reported that a lower than expected 57 Bcf was injected into underground storage for the week ended Sept. 28, the current 3,263 Bcf in storage is only 198 Bcf below last year’s 3,461 Bcf record, which was set in the storage report for the week ended Oct. 20, 2006. Likewise, bulls continued to focus on the constant stream of storm activity down in the Atlantic and the Gulf of Mexico, but none of the disturbances during the week were able to strengthen into so much as a tropical depression.

“Natural gas has eased [Friday] as it looks as though tropical disturbances in the central Gulf of Mexico and near the Bahamas have had ongoing difficulty getting organized into a more powerful structure and forecasts now have 90L drifting over the Texas coast on Saturday and 92L crossing the southern Gulf of Mexico next week, and not necessarily flaring into a more significant storm,” said Tim Evans, an analyst with Citigroup in New York. “Without a threat to supply from tropical storms or hurricanes, the storage and temperature picture remains bearish.”

The Frontier six- to 10-day outlook covering Oct. 10-14 calls for above-normal temperatures for much of the western U.S. and across most of Canada, with normal readings elsewhere. The forecaster’s outlook for Oct. 15-19 is similar, but some cooler-than-normal readings are expected for parts of the Southeast.

Top traders see the market as struggling to deal with a complex melange of volatile petroleum trading, some well above-normal temperature conditions in major energy markets and a tropical storm season that by all accounts may be a repeat of last year’s “no show.” November crude futures, which have been all over the map lately, showed some weakness on Friday, but still managed to settle north of $80/bbl. The contract closed 22 cents lower on the day at $81.22/bbl.

“This market appears to have moved into a bit of a no man’s land in which it can’t quite decide on whether to follow the oil complex, key off of hot temperature forecasts or reduce some seasonal storm premium,” said Jim Ritterbusch of Ritterbusch and Associates. He noted that although another system was evolving in the Caribbean, “this hurricane season is quickly shaping up to be very similar to last year. As a result, we remain of the opinion that a significant amount of storm-related risk premium will still need to be wrung out of this market.”

In spite of November futures holding above $7, short-term traders are apprehensive. “From a fundamental standpoint, the market should be collapsing. There is open-window weather with above-normal temperatures for the next 15 days. This market is all technical and is a ‘house of cards,'” said a New York floor trader.

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