The fact that no less than four storm systems were swirling in the Atlantic or Gulf of Mexico on Wednesday lent more than enough support to the expiring October natural gas futures contract. Able to temporarily shake off the fact that storage levels are more than healthy, traders pushed the contract within a 21-cent range before it quietly went off the board at $6.423, up 6.3 cents from Tuesday.

While October traded between $6.250 and $6.460 on Wednesday, the November contract used the session to close the October-November spread just a little bit more. After trading between $6.940 and $7.130, November natural gas finished Wednesday’s regular session at $7.046, down 4.1 cents from Tuesday.

Even with an active tropics, some market insiders were a little bit surprised that October finished its run as high as it did. “Expiration was fairly orderly, but October went out a little stronger than I had expected. I was looking for something a little closer to $6.100,” said Ed Kennedy, a broker with Commercial Brokerage Corp. in Miami. “I think October might have closed a little bit higher because of the storms.”

Kennedy added that the $5.230 from late August looks like it could be a bottom, albeit for the time being. “If we don’t get any real threat to the Gulf of Mexico soon, we will see lower prices,” he said. “Let’s not forget that October is a much more active hurricane month than August. We are not out of the woods by any stretch of the imagination. Now, if things are still quiet four weeks from now, we are going to uncover some downside here. Let’s face it, there is no shortage of gas.”

Addressing the current storm picture, Kennedy said there are no less than four systems currently on the radar. He noted there is one in the Gulf, one just off Florida, Tropical Storm Karen still well east of the Windward Islands and one near Antigua.

“The one in the Gulf — Tropical Depression 13 — looks like it is targeting Veracruz, Mexico, but nothing else, so I think we can rule that one out,” Kennedy said. “The system just off Florida could develop, but no one knows about direction due to a high-pressure ridge coming into the Atlantic. On Karen, a lot of the independent forecasters are saying the storm, which is near hurricane status, could take a more southerly track over Florida. However, it is so far out there, I wouldn’t bet money on it. A fourth system has just formed near Antigua, which could cause some problems down the road.”

As of 4 p.m. EDT on Wednesday, Karen was 1,175 miles east of the Windward Islands traveling near 12 mph in a west-northwest direction with wind speeds near 70 mph, according to the National Hurricane Center. However, little change in strength was expected over the next 24 hours.

“I think the active tropical picture is going to keep the sellers on the sidelines for the rest of the week, at least,” Kennedy added. “Even if the bears end up doing some business, it will definitely keep them from being aggressive. Aside from the storm picture, I don’t have a whole lot of bullishness right now.”

Joe Bastardi of AccuWeather looks for Karen to become a major hurricane. “I don’t see Karen directly affecting the U.S. for at least 10 days, but I am not going to in any way, shape or form write her off completely,” Bastardi declared. He noted that many a great Atlantic hurricane tried to recurve and this one will at least try, but there is as good a chance as not that she is blocked. “The two things I think: 1) She will be a major hurricane, and 2) Before she can come all the way back here, this pattern will cause great wailing and gnashing of teeth for the South Atlantic coast.”

Tropical Depression 13 lurking in the southwestern Gulf of Mexico does not faze Bastardi either. He looks for it to hit Mexico as well. “It appears stalled near 21.7 N and 94.6 W, and this should go ahead and develop as it sits the next couple of days. The eventual path though, I am confident, is into Mexico,” he said.

When November becomes the spot contract Thursday, lower prices may prevail. In Tuesday’s activity “traders were thinking the market would hold the $6.40s, but it retreated,” said a New York floor trader. “I look for the market to trade down to $6.40 when November becomes the spot month.”

Market technicians don’t see the market making any great moves anytime soon. “While Monday gave a sharp rally and a strong close, we were not impressed. We pegged $6.515 for resistance and natgas took a dive from a $6.530 high,” said Walter Zimmerman of United Energy. He noted that from last week his company was looking for a nontrending whipsaw market to emerge from the vicinity of a $6.760-6.810 resistance zone. “Since then natgas reversed higher from a $5.730 low, and it just now may have reversed lower from a $6.530 high. That makes three reversals in six days — a whipsaw market by any standard. Lots of price action but no trend,” he concluded.

Turning attention to Thursday morning’s natural gas storage report for the week ended Sept. 21, most people within the industry appear to be looking for the Energy Information Administration (EIA) to report an injection in the neighborhood of 70 Bcf to 80 Bcf. A Reuters survey of 25 people within the industry resulted in an average expectation of a 73 Bcf build.

Golden, CO-based Bentek Energy said its flow model indicates an injection of 76 Bcf, which would bring stocks 1% below the five-year high (set last year) and 8.1% above the five-year average. The research and analytical energy firm said it expects a 42 Bcf injection in the East region, a 23 Bcf build in the Producing region and an 11 Bcf addition in the West region.

“Storage fill nationwide increased 1.9%, from 85.5% to 87.4% this week,” Bentek said in its weekly Natural Gas Storage Outlook. “The largest percentage increase was at Egan [in Louisiana], up 9.7% from 66.6% to 76.2% and Petal [in Mississippi], up 9.6% from 69.9% to 79.5%. Ft. Morgan [in Colorado] decreased by 1.2%, from 96.9% to 95.7%.”

The injection number revealed by the EIA Thursday morning at 10:30 a.m. EDT will be compared to last year’s 79 Bcf build for the week and the five-year average injection for the week of 74 Bcf.

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