After failing to move through Monday’s $3.40 high, natural gas futures checked lower yesterday, as traders liquidated longs amid waning tropical storm concerns and ahead of potentially bearish storage data to be released today. Although modest advances were seen in the afternoon, losses sustained earlier in the day were more sizeable, leaving September with a 5.7-cent decline to finish at $3.296.

Traders polled by NGI Tuesday were quick to point to diminishing concerns that a tropical disturbance located in the Caribbean Sea could pose a threat to natural gas assets in the Gulf of Mexico as a reason for the price weakness. “Things got a little overdone [Monday]. Sure the weather is hot and there is some activity in the tropics, but it does not explain a 16-cent rally,” a trader commented. According to the Weather Channel, the system will continue moving toward the West/Northwest at about 15 to 20 mph, but development, if any, will be slow.

Also of interest to traders yesterday was another large cluster of showers and thunderstorms that had just pushed off of Africa south of the Cape Verde Islands Tuesday. While still thousands of miles away from the Gulf, it will be closely watched as it begins its journey west. As of press time last night the National Hurricane Center had not issued any advisories on either of these systems.

However, it is a good bet that all that weather watching will take a back seat to some good old fashion fundamental data when the American Gas Association releases its weekly storage report this afternoon. Expectations ahead of that report are centered on a 75-90 Bcf build, which if realized will easily surpass last year’s 63 Bcf refill and the five-year average injection of 59 Bcf. Comparatively, the market has injected an average of 94 Bcf into the ground each week since the beginning of April. Last week’s refill registered 84 Bcf. Storage is currently 269 Bcf more than year ago levels and 164 Bcf more than the five-year average for this time of year.

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