Despite being greeted by the first three named storms of the 2009 Atlantic hurricane season, one of which could make a Gulf of Mexico appearance late this week, front-month natural gas futures reached an almost seven-year low late during Monday’s regular session when the September contract touched $3.117. The contract finished the day at $3.163, down 7.5 cents from Friday’s finish.

Monday’s low wiped out the previous $3.155 low point for this move, which was recorded on April 27. To find lower prices than Monday’s $3.117 mark one would have to venture back to the first week of September 2002, when the October 2002 contract recorded a $3.100 low.

Crude futures continued doing their part on Monday in helping natural gas values slide to lower price levels. September crude shaved 76 cents on the day to close at $66.75/bbl. Over in the natural gas arena, market participants noted that the fundamentals remain the same.

“We are seeing the same old story around here,” said a New York trader. “New supplies are ample, storage is full and gas demand, much like the economy, has not rebounded yet. Adding to that is the fact that summer on the whole has not been warmer than normal and that the hurricane season has so far failed to impress. Sure we now have three named storms, but none of them really have the traders talking very much because of their projected paths or lack of strengthening potential. I don’t think it is out of the question that we could see prices slip below $3, but any adventure into those price levels would most definitely be short-lived.”

The one storm that could have some repercussions on the oil and natural gas industry in the Gulf of Mexico is Tropical Storm Ana, which was actually downgraded to a tropical depression on Sunday (see related story).

“If Ana can hold together over the next few days as it brushes the large, mountainous northern Caribbean islands, the storm could redevelop into a stronger tropical system once it emerges into the southeastern Gulf of Mexico late this week,” said Alex Sosnowski, an AccuWeather.com meteorologist.

Sosnowski noted that Ana has shown “a will to survive” and could strengthen rapidly if the system remains intact by the time it enters the very warm waters of the Gulf of Mexico.

Citi Futures Perspective analyst Tim Evans said the arrival of the first three named storms of the 2009 Atlantic hurricane season offered both the bulls and the bears something to sink their teeth into. “The natural gas market briefly considered a rally on the pickup in Atlantic storm activity over the weekend, with three storms earning names,” he said. “One the one hand, the increased activity shows that conditions have become more favorable for hurricane development. On the other hand, though, out of perhaps 10 named storms forecast for the season we can now cross three off the list.”

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.