Showing that there is currently no weakness in the natural gas complex, November futures followed last week’s sizeable run-up with another burst Tuesday morning. The prompt month in Monday overnight Access trading jumped 34.5 cents to open Tuesday above the psychological $7 mark.

As of 11 a.m. (EDT), November natural gas futures were trading at $7.07. The prompt month closed 43.9 cents up on the day at $7.164. The remainder of the winter strip closed above the $8 mark.

Commenting on the Access run-up, a Washington, DC-based broker said he believes a number of factors are at play. “We still have the issues in the Gulf of Mexico,” he said. “These issues are real, even though the shut-ins are coming at a time when there is adequate storage inventory. However, you have to remember we are coming towards winter, where Washington, DC is expected to already dip into the 30s on Wednesday.” However, this would be an anomaly. DC temps Thursday and on succeeding days are expected be in the 50s-70s range, which is the norm for this time of year.

The broker also said that the November contract looks as if it is currently in a five-wave advance. “If you look at the chart for November, you can see the development of a very standard and very classic five-wave advance starting on Sept. 16 with the low at $5.23,” he said. “You went from that level all of the way to $6.41 by Sept. 22, and then you started a setback. The setback only lasted for four days or so until Sept. 28, when November went to $5.91. Then you had a big move up to $7.23 last week, another little setback to $6.50, and now we are starting to move higher again.”

The broker said that according to traditional technical trading, he would expect that November could go even a little bit higher. “If the fifth wave is the same length as the first, which is one of the common things you see, I could see it getting up to approximately $7.70 on the upside.”

Another imposing factor on natural gas futures is crude’s sizeable run-up. After hitting a new all-time high of $51.29, November crude futures settled at $51.09, up a whopping $1.18 on the day. A number of market watchers over the past week have noticed that the natural gas complex has appeared to have re-hitched its wagon to big brother crude, after taking a different path the last few months.

Touching on the Gulf shut-in situation, IFR Energy Services’ Tim Evans said he believes that the natural gas market remains somewhat out of sync with its own fundamentals. “When Hurricane Ivan was just raging through the Gulf of Mexico, the prevailing assumption was that damage would be slight and that production would soon be back,” he said. “Now, even as the data from the U.S. Minerals Management Service shows some modest improvement in supply, natural gas prices are surging again, as if the production were actually desperately needed” (see related story).

The MMS reported Tuesday that approximately 1.7 Bcf/d remains shut in in the Gulf, down from 1.98 Bcf/d on Monday.

Noting that November natural gas is currently attacking the $7.23 high from Sept. 29, Evans said a push beyond that barrier would put prices at their highest level since January and last December, when two highs were posted at $7.44 and $7.55. “We think the market will have difficulty sustaining these higher levels, even if it does manage to explore beyond them,” he said.

Looking ahead to the Energy Information Administration’s Thursday storage report for the week ended Oct. 1, Evans is calling for 60-70 Bcf in net injections. Citigroup’s Kyle Cooper is looking for a build between 65 and 75 Bcf. Whatever the injection is, it will be compared to last year’s 84 Bcf injection and the five-year average build for the week of 64 Bcf.

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