Mounting bearish fundamentals, including plummeting crude oil prices due to concerns about a potential recession, helped pull October natural gas futures down to a new all-time low for the October contract and to the lowest near-month price since November 1999. October ended the regular trading session down 12.3 cents to $2.102 with a low of $2.080 and a high of $2.190.

The abbreviated open outcry session was ended before the American Gas Association (AGA) was scheduled to release fresh natural gas storage data, but at 2 p.m. AGA reported that it would withhold its storage report until Thursday at 11:30 a.m. EDT at the request of Nymex, the Commodity Futures Trading Commission and its own legal staff.

“Both the Nymex and the [Commodity Futures Trading Commission] advised that information should go out when the market is most liquid and that is when there is the most trading,” AGA Deputy General Counsel Michael Murray told NGI. “Based on that reasoning, we made the notice at 2 p.m. that the report would be released tomorrow at 11:30.” Murray added that this does not mean AGA will consult with Nymex in the future regarding the release of its storage report. He said it was a one-time event triggered by extraordinary circumstances.

The market is anticipating another hefty injection because of continued mild weather, demand declines and increasing production. Expectations range from 85-100 Bcf. Last week, the AGA reported a 95 Bcf injection, with working gas standing at 2,667 Bcf, or 409 Bcf more than at the same time last year. During the same week last year, the AGA reported a 72 Bcf injection.

“I think it’s still a situation of pretty bearish fundamentals overall. Without any weather, without any activity in the tropics, with concerns about recession and without any attacks on the nation’s energy infrastructure, the fundamentals are pretty poor and they will continue to pressure prices lower,” said Kyle Cooper of Salomon Smith Barney. He predicted prices would eventually fall below $2. “Until you bring some demand back, it will go lower. Whether that is $1.75 or $1.50 or whatever, we need to balance out the supply and demand. That’s not happening yet. We need some cold weather and manufacturing demand coming back and that doesn’t look likely. Overall, I think the odds will point toward continuing price declines.” Cooper said he expects AGA to report an 88-98 Bcf storage injection today.

There’s nothing bullish out there right now, said Tom Saal of Miami-based Pioneer Futures. “However, the market will probably find scaled-down buying from here to about $1.85,” he said. “I would be surprised if it free-fell because the question is who is going to sell it. If people are long, they are probably going to hold their position. They could sell the winter, which is a good nice premium to the prompt [month contract]. Maybe that could help push it down. There is support at $2.08, $2, $1.95 and $1.85. As it approaches $2, that will be an area [where] people probably will be more eager to buy,” Saal predicted. “There was consolidation around $5, $4 and $3, so I would expect them to consolidate around $2 also.”

Some risk of hurricane threat to production in the Gulf of Mexico remains, noted Tim Evans of Pegasus, “but the mood is increasingly complacent on that account, and we’re far from convinced that the current tropical wave touring the Caribbean from east to west will change that. There are still plenty of speculative shorts in this market, but with no fundamental reason at the moment to test their confidence.”

Evans said if the market does attempt a recovery, the October contract will encounter minor resistance at $2.20 and at the failed support level of $2.25. The next “tranche of selling” would occur probably near the $2.30-2.35 price gap followed by the earlier $2.44-2.54 gap and the $2.72 peak from Friday.

The most likely path, however, is down to $1.90-2, he said. Although that area was expected in the afternoon Access session, early indications showed a modest rebound to $2.13.

Nymex said late yesterday that it will resume regular trading hours next week. Trading on the Internet-based Nymex Access platform will resume regular hours beginning Sunday night at 7 p.m.

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