Natural gas prices remained on a roller coaster ride of volatility yesterday as bull traders used the latest storage data as a battering ram to propel prices higher in the last 30 minutes of trading. The December contract received the biggest buying boost, posting a 10.8-cent gain at $3.291. The 12-month strip lagged only slightly, advancing 8.4 cents to close at $3.383.

According to the American Gas Association, 23 Bcf was added to underground storage facilities for the week ending Oct. 26, bringing storage levels to 94% full at 3,090 Bcf. The refill was bullish, not only because it fell short of expectations centered around the 40 Bcf area, but also because it was just a fraction of last year’s 70 Bcf injection. Storage now stands 370 Bcf above year-ago levels, down from the 425 Bcf differential a week ago.

The Eastern Consuming Region added 25 Bcf to reach 1,782 Bcf ,and the Western Consuming Region showed no change to remain 93% full at 469 Bcf. In reaction to the cool temperatures seen across the region last week, the Producing Region kicked off its withdrawal cycle with a net 2 Bcf takeaway.

For many market watchers, the biggest surprise yesterday was not the storage report itself, but rather the market’s knee-jerk reaction to the number. It took the prompt month just 3 minutes yesterday to rally 27 cents to notch a new two-month high at $3.44. The market reacted similarly last Wednesday, led by a November contract that rocketed 32 cents in just two minutes to notch what was then a new two-month high at $3.00.

Nymex yesterday announced that the exchange would (as it has in past years) remain closed on the Friday after Thanksgiving. The exchange also announced that the abbreviated hours that have been in effect for much of the last month, would continue through year’s end. Natural gas is currently set to trade from 10a.m. to 2:30 p.m. EST each day. Access trading will also continue unchanged though the remainder of the year, with trading set to begin at 3:15 p.m. EST and end at 9 a.m. the next morning on Monday through Thursday. On Sunday, Access trading will begin at 7 p.m. EST.

Also out of the Nymex press room this week is the announcement that the exchange will introduce exchange of futures for swap transactions (EFS) beginning Thursday as the first step in its plans to offer clearing services to the increasingly liquid over-the-counter (OTC) market (see Daily GPI, Oct. 31).

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