Fueled by a steady stream of short-covering, natural gas futuresambled higher for much of the session yesterday before erupting inthe last 30 minutes amid a frenzy of market-on-close buy orders.That enabled the November contract to push through recent highsabove $3.10 and settle up 8.1 cents at $3.092. Strength was equallyimpressive in the new prompt contract, December, which finished up7.5 cents at $3.223. Estimated volume across all contracts washeavy, with 112,119 positions changing hands.

In addition to expiration-day position squaring, several sourcessaid a portion of yesterday’s strength was derived from bullishspeculation ahead of the storage report. That concern may have beenwarranted because shortly after November settled, the American GasAssociation reported that just 13 Bcf was injected into undergroundstorage facilities last week. And while some suggest that a smallrefill was all that was possible considering the current 92% fulllevel, others expected a build on the order of 25-35 Bcf, justshort of last year’s 36 Bcf.

The newly anointed spot month, December, was quick to react tothe storage news last night by spiking to $3.275 early in theAccess trading session. However, by 7 p.m. the market had reversedto trade down to $3.19.

Looking ahead, a Chicago utility buyer remains bullish on pricesand believes the low storage injection is evidence of tight supply.”Last week we had our first taste of cool weather and prices wereup 20 cents while storage injections were off. What is going tohappen when we get our first blizzard?” he asked. “What you have toremember is that even a normal winter will be much colder than lastyear.”

But according to a new report by the National Oceanic andAtmospheric Administration (NOAA) this winter may not be too muchdifferent from the last. As part of the official winter forecastreleased Tuesday, NOAA said the La Nina climate cycle that began in1998 will continue to influence the nation’s weather through Marchand could produce above-normal temperatures for the Midwest,southern New England, and the mid-Atlantic states.

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