The November natural gas futures contract closed down 3.1 centsyesterday at $2.824 after trimming gains notched earlier in thesession. After a spirited sell-off in Tuesday’s Access trading, thenewly crowned prompt month erupted higher Wednesday to print a$2.94 high as buyers picked up contracts which they hope willrepresent bargains heading into the winter heating season. Byafternoon, however, the market banter had turned once again tobearish storage predictions and that pressured the market lower inlight trade.
Yesterday’s early price strength was a source of confidence forbulls who have had little to cheer about lately. An Oklahomaproducer was making as much noise as possible about two newtropical disturbances in the Gulf of Mexico. As of press timeyesterday the National Weather Service (NWS) was tracking a broadarea of low pressure located in the central and western CaribbeanSea and also a tropical wave bringing heavy winds and rains to theWindward Islands. The NWS said both storms had the potential tostrengthen over the next few days.
However, a Dallas-based trader was not as optimistic. “Wetouched a key regression level on the daily charts at $2.92, butwere unable to hold up there. Daily charts are looking prettybearish. There is some hope if you’re looking at a weekly chart,but that won’t last if we don’t take out some prior weeks’ highs,”she said.
According to the American Gas Association 79 Bcf was injectedinto underground storage last week bringing the total to 2,825 Bcf,45 Bcf short of year ago levels. Storage is now 87% full with 5weeks left in the injection cycle. An average weekly injection ofjust 60 Bcf over that period will put storage on par with lastyear’s record levels.
Although the 79 Bcf was nestled comfortably within the 75-85 Bcfrange of expectations the market was down as low as $2.771 in lastnight’s Access session.
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