With lowly Ernesto — now a tropical depression — sticking to a northern path and allowing the Gulf Coast to continue to quietly observe Hurricane Katrina’s one-year anniversary, October natural gas futures dug lower Wednesday, exploring price territory carved out Tuesday by the expiring September contract.

After reaching a low of $6.250 Wednesday afternoon, October natural gas inched higher to close at $6.290, down a hefty 58.6 cents from Tuesday’s close. A number of traders said the move lower was the weather premium continuing to be extracted from the market, and technical analysis suggests short-term easing.

Ernesto made landfall late Tuesday night as a tropical storm at Plantation Key in Florida. It is not considered a threat to Gulf petroleum infrastructure and was sporting winds of 35 mph Wednesday afternoon. According to the National Hurricane Center, it is projected to weaken and continue north before heading out into the Atlantic and then making a second U.S. landfall in South Carolina.

However, the season is not over “til it’s over.” AccuWeather is tracking tropical waves along 37W south of 16N, and along 48W, south of 24N. The forecasting firm said both waves are moving west at about 6 degrees longitude per day and feature some organized upper-level circulation but no important lower-level development. “Some computer information is hinting at possible development of either or both waves in the a few days. But this is highly uncertain at this point,” AccuWeather admitted.

Prior to Wednesday’s session, Tom Saal of Commercial Brokerage in Miami was looking for the market to work lower before moving higher. In his work with the Market Profile he has identified three price zones that he expects October futures to eventually reach. His first zone is $6.490 to $6.740, but he expects the October futures to eventually revisit $7.120 to $7.238 and $7.332 to $7.610.

Looking at Thursday morning’s natural gas storage report for the week ended Aug. 25, most industry projections appear to be looking for an injection in the 50s Bcf area. A Reuters survey of 18 industry players expects the Energy Information Administration to reveal a 54 Bcf injection for the week.

Golden, CO-based Bentek Energy is projecting a storage injection of 51 Bcf, which would result in 2,908 Bcf of gas in storage. The company pointed out that 2,908 Bcf of working gas in storage is 12.5% above the five-year average and 6.3% over the five-year high. Bentek is expecting a 37 Bcf injection in the East region, and 7 Bcf to be deposited in both the West and Producing regions.

The number revealed Thursday morning will also be compared to last year’s 58 Bcf injection and the five-year average build of 67 Bcf.

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