Borrowing from the old question about whether a tree falling in a deserted forest actually makes a sound, gas futures market observers wondered Thursday whether the 44 Bcf storage injection reported by the Energy Information Administration (EIA) actually had any market impact because no one seemed to notice its release.

The EIA said that working gas levels in storage at the end of last week rose to a record high (in its weekly series, which started in 1994) of 3,293 Bcf. However, the gas futures market didn’t seem to care. December natural gas futures fell 12 cents on the report within the first 10 minutes, only to rebound back even higher a few minutes later. However, the prompt month then followed crude futures lower for the remainder of the day to settle at $8.199, down 55.3 cents on the day. December crude dropped $2.06 to close at $48.82.

“Coming into Thursday I had said that if natural gas took out $8.46, then we would see $8.10,” said Ed Kennedy of Miami-based Commercial Brokerage Corp. “Well, we got $8.10 as the low on the day. My next number is $7.74. We had a lot of fund and trade selling. Local [traders] jumped ahead of it.”

Noting that crude was also down, Kennedy said that what was really amazing was the fact that the stock market broke out to the upside. “There has been this correlation between crude and the stock market as of late,” he said. “It’s just interesting that everything hit in one day. It’s almost as if those hedge funds are saying that the energy prices are going to be heading down now, we don’t need our hedges. We will have to see what happens Friday, but it looks like we are going to be working lower.”

Despite the big down day in natural gas, market insiders said the storage report had nothing to do with it.

The EIA reported that a whopping 44 Bcf was injected into underground storage for the week ended Oct. 29, far outpacing last year’s 34 Bcf injection and the five-year average build of 14 Bcf. Market watchers polled by NGI had been looking for a build of 30-46 Bcf.

The 3,293 Bcf of working gas in storage surpasses the previous record of 3,254 Bcf in the EIA weekly survey, which was established during the week ended Nov. 30, 2001. However, the EIA’s monthly historical data shows that the all-time record of 3,472 Bcf was registered in November 1990.

“The report is meaningless,” Kennedy said. “The only thing that will move this market now is weather. We are full. That has been the story for the last three weeks. However, if it’s a cold winter like two years ago, we are going to need it all.”

Kennedy said that cold weather is supposed to hit this weekend in the Midwest. “The National Weather Service says the cold is going to be three days and out, but some of the independent forecasters are saying that the cold will become entrenched,” he said. “We’ll see. The independents are forecasting a winter like the one we had two years ago, where it got cold in November and stayed that way until March. No record cold, but no cycling either.

“Everybody is a little gun shy with long range forecasts because everyone said this past summer was going to have above normal temperatures and it never showed up,” Kennedy added. “So we will have to wait and see.”

Stocks are 138 Bcf higher than last year at this time and 239 Bcf above the five-year average of 3,054 Bcf, according to EIA estimates. The East region led the week’s charge by injecting 27 Bcf underground, while the Producing and West regions contributed 16 Bcf and 1 Bcf, respectively.

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