Just one day after it appeared that the central Gulf of Mexico would receive the brunt of Hurricane Ivan’s wrath, new forecasts now suggest instead that Florida might be forced to brace for its third powerful storm in a month’s time. The forecast sent natural gas futures sharply lower in afternoon trading Wednesday.

After running up to notch a $4.895 high in overnight Access trading, the October natural gas futures contract stayed within the $4.80s for a majority of Wednesday until the storm’s new projected path went public. With Gulf production expected to be safe for the moment, the prompt month began falling at 1 p.m. (EDT), giving back all of its gains. The contract settled at $4.631, down 15.9 cents on the day.

The new forecast has Ivan running further to the east, tracking over central Cuba and possibly hitting the Florida Panhandle. The National Hurricane Center said that Category 4 Hurricane Ivan as of 5 p.m. (AST) was approximately 95 miles north/northeast of Bonaire and 685 miles east/southeast of Kingston, Jamaica. The storm was moving near 17 mph in a west-northwesterly path, with maximum sustained winds near 140 mph.

“The only thing that would have been able to hold this market up was something coming into the Gulf,” said Steve Blair of Rafferty Technical Research in New York. “Otherwise, the normal market fundamentals are still obviously very bearish.”

In addition to the forecast change Wednesday, Blair noted that the market was also responding to the bounce from last week’s $4.62 low to the resistance met in overnight trade. “I thought the market might run up into the low $4.90s, but it failed quite miserably,” he said. “I think between the resistance October met, along with the fact that traders aren’t concerned about Ivan for the moment, allowed the market to fall back down into the low $4.60 levels.

“While the market could possibly hold at their current levels, [Wednesday’s] action on the chart was pretty negative. It wouldn’t be surprising for this market to take its next downward stab to the $4.40-4.44 level.”

As for the natural gas storage report to be released Thursday morning by the Energy Information Administration, Blair said he is hearing injection expectations in the high 70s to the low 80s Bcf again.

Tim Evans of IFR Energy Services said the consensus expectation is 80-85 Bcf. However, he noted that the five-year average is 80 Bcf and injections over the past four-weeks have averaged 21 Bcf more than that benchmark. “This is part of our thinking with our 95-105 Bcf projection, which now looks as though it will carry some added psychological weight if we happen to be right,” Evans said.

In addition to going up against the 80 Bcf five-year average, the storage figure for the week ended Sept. 3 will also be compared to last year’s sizeable 99 Bcf build.

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