Like a weary traveller who comes home to gracefully pass on, the November contract moved quietly sideways and lower in expiration-day trading Wednesday as traders contemplated a market that had fallen perilously close to new one-year prompt-month lows after having soared during the month of October.

November finished its tenure at $4.459, down 2.7 cents for the session, 16.2 cents for the month, and a whopping $1.341 below its Oct 10 high of $5.80. By falling so dramatically in the second half of the month, November expired just 2.9 cents above October’s final resting place at $4.43. A year ago the November 2002 contract went off the board at $4.126.

Before the session began, traders agreed there was a possibility for short covering. Citing a considerable options volume in the $4.50 to $5.00 range, Tom Saal of Commercial Brokerage Corp. in New York cautioned his clients for a rebound. “You have some of the [upward price] momentum picking up….I don’t necessarily look for a big spike, especially ahead of the storage data [Thursday], but we could see some consolidation at current levels.”

As it turned out, consolidation was what the market exhibited with buyers and sellers almost evenly matched Wednesday. Book squaring was the main feature of the day with many traders looking to be flat not only as December becomes prompt Thursday, but also when fresh storage data is released. At 98,102, estimated volume was on the light side for an expiration-day.

As is usually the case, storage data will take center stage Thursday at 10:30 a.m. EST when the Energy Information Administration releases its latest estimate of working gas in storage. Expectations are centered on a build of 60-70 Bcf. If realized, a number of that magnitude would easily surpass the five-year average refill of 36 Bcf, in addition to lifting inventories to just below the 3,100 Bcf level. Based on the weather this week, the stage is set for another sizable injection in the following Thursday’s release.

However, Thursday’s net injection may quickly get pressed to the background as traders and analysts will undoubtedly struggle to make sense of a data revision set to be released by the EIA Thursday. In an unprecedented move last Thursday, the EIA announced that there will be a massive storage revision as part of the next scheduled report. Specifically, the group said it would revise data from July 4 though the present, based on a new survey methodology that would increase the number of companies surveyed from 44 to 55. Because it is thought that this will bring the weekly data closer to the monthly data, most market-watchers are bracing for an upward revision to current working gas levels (see related story).

Saal, however, indicated that he is modestly bullish. “In addition to the weather demand that is just around the corner, you have continued demand for storage gas. The spreads continue to make it economically prudent to buy physical supplies and inject that gas into the ground. The incentive is out there for both utilities and marketers — anyone that can put physical molecules in the ground.” For Saal, these storage injections will drive cash prices, which in turn will prop-up December futures.

In daily technicals, December’s chart looks a little more promising than did November’s, having made a higher-low on the daily chart Wednesday. Support exists in that $4.75-77 area, which may be the only impediment between current levels and bottom of the rollover chart gap at $4.51. On the upside, December will see selling against the $4.93-$5.00 area, and then again up to the top of its own chart gap at $5.04. Should December remain above $4.75 and then settle above $4.94, odds are good that the recent decline is complete and gas can expect a move higher.

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