Natural gas futures were trading fast and furious Wednesday as traders worked to get their respective positions in order ahead of the October contract going off of the board. As a result, October natural gas plummeted to $4.070 — marking a new low for the extended move — before expiring at $4.201, down 32.5 cents on the day.

The last time a prompt month traded lower was all of the way back on Nov. 15, 2002, when the December 2002 contract reached a low of $3.900. Market participants have come to expect almost anything on expiration day. The surprise Wednesday was almost breaking below $4.

There were “mainly locals selling because it is expiration day,” said Ed Kennedy, a broker with Commercial Brokerage Corp. in Miami. “Traders are getting their books in order.”

November natural gas, which is now the prompt month, also was shedding extra weight on Wednesday. The contract reached a low of $5.430 in morning trade and went on to close at $5.669, down 13.6 cents on the day.

As for whether November could soon be occupying October’s recent price territory, Kennedy said it all depends on the weather. “The whole story from here on out involves the weather. Tell me what the weather is going to do, and I’ll tell you whether we are going higher or lower. Storage is already decided. It will be full by the end of this month, which is a month early. Whatever that number is, it will be full, whether it is 3.3 Tcf, 3.4 Tcf or 3.5 Tcf.”

While acknowledging that the market is oversold, Kennedy said the only thing that could create a pop is cold weather. He also added that the winter months likely won’t drop significantly. “There is good buying under the winter months,” he said, “so it is going to be tough to get them down heavily.”

Citigroup analyst Tim Evans said the bears still seem to have total control of the natural gas futures market. “The trends are still 100% bearish here,” he said. “Storage injections are still stout and the weather outlook for next week still looks on balance to be on the bearish side of the equation with above normal temperatures in the Rockies and across into the Midwest. What is going to turn the market’s direction around here? While there is still some risk of a hurricane getting into the Gulf of Mexico, that is looking more like a desperation scenario as we are running out of time for that to happen.”

Focusing on the November contract, Evans said with the way prices have been moving in large chunks, November could see October-like prices pretty easily. “With October futures behind us, it’s an interesting race from here to the November expiration on Oct. 27,” he said. “That is right around the time that storage will be hitting its peak for the year and we are looking at a situation where some gas production is going to have a real hard time finding a home. This could make for an interesting time for prices. The way prices on the forward months have marched down here, the question becomes how many days does it take to drop a dollar off of the price. The answer is possibly five or six, so prices could decline quickly if the downward direction continues.”

With the October contract in the past tense, the industry’s attention now turns to Thursday morning’s natural gas storage report for the week ended Sept. 22. Evans said he thinks the Energy Information Administration (EIA) will reveal an 85 Bcf injection, while Jay Levine, a broker with enerjay LLC, said he is expecting an 81 Bcf build for the week. A Reuters survey of 22 industry players is expecting an average build of 84 Bcf, while the ICAP derivatives auction held after the close of Nymex floor trading Wednesday showed a consensus estimate of an 86 Bcf build.

An injection in the 80s would be significantly larger than last year’s 56 Bcf build while just covering the five-year average injection of 75 Bcf.

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