After trading in a range between $3.507 and $3.613 during Wednesday’s regular trading session, November natural gas futures ended up adding 2.6 cents to Tuesday’s rally to close Wednesday at $3.539.

Just when you thought it might be safe to declare the 2010 Atlantic hurricane season finished, conditions are pointing towards a low in the western Caribbean becoming the Atlantic’s next tropical depression, or even Tropical Storm Richard, before the week is finished. senior meteorologist Kristina Pydynowski said most computer models show the low making a loop and pressing into either Central America or Mexico’s Yucatan Peninsula over the weekend and into next week. However, a United States or Gulf of Mexico hit are not out of the realm of possibilities at this point.

“If the low eventually takes a track towards the Yucatan Peninsula, it cannot be totally ruled out that it might be steered towards south Florida,” Pydynowski said. “There is also the potential that the low will head more towards Cuba than Central America.”

Some traders believe the news has injected a modest amount of storm premium into the market.

“It’s not over until it’s over,” said a New York trader. “To count out the hurricane season this early is not a smart move. Sure, this current system does not look like it will impact Gulf of Mexico infrastructure, but it’s really too early to tell.”

Traders suspect that there was not much substance to Tuesday’s 8.2-cent rally in the November contract. “In early trading, November natural gas prices dropped to print new 13-month lows, but they rallied later on in the day,” observed an eastern energy analyst. “That is something we have seen in the past on days when oil futures and assets are under pressure. As we have noted here before, natural gas has been used as the short leg in a spread with its long leg in oil or other assets. As a result, on sharp declines in oil, we sometimes see natural gas prices rally.”

November crude oil tumbled $3.52 to settle at $79.49/bbl in Tuesday’s trading. Countering that theory to a degree was Wednesday’s action. While front-month natural gas gained 2.6 cents, November crude bounced back to add $2.28 to close at $81.77/bbl.

Turning attention to the storage situation, it would appear the industry is in for yet another injection that is much larger than historical comparisons. For the week ending Oct. 15, most industry estimates are for an injection in the high 80s Bcf to the mid 90s Bcf.

A Reuters survey of 28 industry players produced an 82-89 Bcf injection range with a median build prediction of 89 Bcf. An injection anywhere in the expected ballpark would be much larger than both last year’s 23 Bcf addition for the week and the five-year average build of 54 Bcf.

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