Natural gas futures bulls stopped the slide in values on Wednesday as the December contract traded in a tight range before ending the day at $4.503, up 3.6 cents from Tuesday’s close.

The prompt-month contract traded within a slim 13-cent band during the regular session between $4.436 and $4.566, but the resulting gain of a few pennies was a far cry from Tuesday’s 20.3-cent drop. One analyst suggested that all of the “bad news,” i.e., bearish fundamentals, is accounted for in the current price, so the downside is likely limited.

Citi Futures Perspective’s Tim Evans suggested that the push higher Wednesday morning was the market “getting its legs back under it after the disappointment of being unable to rally despite a tropical storm in the Gulf of Mexico. There may have been little or no damage and production may quickly return to normal, but there will also be some loss of output, perhaps 7-10 Bcf over the course of three to four days.”

Evans added that some pockets of heating demand could be showing up despite forecasts. “Seasonally, there may also be some added heating demand coming into play, although we note the current temperature outlook for warmer-than-normal temperatures is not really much support at this point,” he said. “All in all, this suggests that the main support for prices here is simple bargain hunting on the belief that the price drop of the past two weeks was overdone, rather than any more convincing fundamental premise.”

As for this week’s natural gas storage report for the week ending Nov. 6, it appears that many industry estimates are for an injection in the high teens to low 20s Bcf. In observance of Wednesday’s Veterans Day holiday, the Energy Information Administration (EIA) has pushed the report back one day. The report will be released at 10:30 a.m. EST on Friday.

Evans said he is expecting a 20 Bcf injection, while a Reuters survey of 25 industry players produced an injection expectation range of 10 Bcf to 23 Bcf with an average build expectation of 18 Bcf. Bentek Energy projects an injection of 21 Bcf, which would bring inventory levels to a record high of 3,809 Bcf.

“An injection of 21 Bcf is 10 Bcf below the five-year average and 43 Bcf below last year. Historically, the five-year average injections continue through the second week in November. This year a mild weather forecast could result in injections continuing later into the month,” Bentek said.

The research firm noted that the East Region has the largest remaining capacity of the three regions with inventory levels at 96% of the demonstrated peak capacity, while the West and Producing regions are currently at or above the demonstrated peak capacity reported by EIA.

Some analysts suggest that mild temperatures could delay peak storage past mid-month but are unwilling to initiate additional sales recommendations under the assumption that the market has fully discounted an oversupplied market.

“These mild trends could potentially delay the storage peak for an extra week to the 20th as opposed to the average on about the 13th,” said Jim Ritterbusch of Ritterbusch and Associates.” He added that maintaining any early market strength could be difficult “unless some of the temperature forecasts begin to show a shift toward colder patterns. This could enable storage to push up into the 3.82-3.83 Tcf zone prior to seasonal withdrawals that will be beginning later this month.”

Ritterbusch argues that the record supply has been discounted. “Since we feel that the bad news is out as far as this market is concerned, we remain reluctant to follow this price decline. Instead, we still favor probing the long side of the first quarter contracts with the December futures in the $4.50-4.55 zone or lower. Stop protection would be advised on contract lows at the $4.34 level.”

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