After trading in positive territory for most of the session, the natural gas futures market dropped lower in the final hour of open-outcry trading Monday on selling ahead of Thursday’s storage report. The October contract was the hardest hit, tumbling 11 cents to finish at $4.661.

Given the choice of siding with storage or storms, the natural gas futures market has repeatedly chosen the former this summer as bearish injections have trumped a fairly active tropical storm season. That was never more true than on Monday when natural gas prices dove lower in anticipation of a near record-setting storage injection expected out this Thursday (see related story).

Early expectations call for a 80-105 Bcf refill, which would easily exceed the 74 Bcf injection from a year ago, the 68 Bcf five-year average and the 70 Bcf injection released last week. In 2001, the market injected a whopping 97 Bcf. “A build of 85 Bcf would exceed the five-year average by 25% and continue to place inventories on track to reach the 3,000-3,050 Bcf range,” wrote Kyle Cooper of Citigroup. His personal estimate is for a 95-105 Bcf refill.

And while Cooper remains bearish on storage, he is not adverse to taking some profit on his November call-option shorts. Specifically, Cooper looks to buy back the $6.00 calls he sold for 25 cents last month, if and when the price dips to the 7-8 cent area. As of Monday afternoon, those calls were trading at about 11 cents.

However, in order for prices to continue lower, the market will need to dodge a few more bullets at what is now the peak of the tropical storm season. As of Monday evening, the National Hurricane Center was tracking two storms that could pose a threat to natural gas assets in the Gulf of Mexico: Tropical Depression # 14 in the far Eastern Atlantic and Hurricane Isabel.

A major category 3 hurricane packing sustained winds of 125 MPH as of press time Monday night, Isabel was tracking toward the west/northwest at near 14 MPH. While some weather watchers are quick to discount Isabel’s threat to the Gulf Coast because of her similarities Hurricane Fabian, which turned north and battered Bermuda over the weekend, Weather 2000 believes that is premature and is quick to note that a change in upper level steering currents, the position of the Bermuda High and other weather phenomenon can change a storm’s expected track overnight.

“Anyone who decidedly predicts Isabel to definitively head one way or another is ignoring one of the major tenets in medium-range prediction: probabilistic forecasting,” the NY-based weather consultants wrote Monday. That being said, the group gives Isabel a 40% chance of reaching the Gulf of Mexico.

In daily technicals, October futures scored one for the bears by dropping below and closing below support at $4.67 Monday. Major support exists at $4.55 and chart-watchers fear a break of that level could lead to a free-fall down to the $4.10 area. On the upside, resistance is seen at Monday’s high of $4.885 closely followed by October’s 40-day moving average in the $4.93 area.

NYMEX and EIA schedule for Sept. 11: In observance of the anniversary of the World Trade Center tragedy and in remembrance of the 21 members and former members that perished, the New York Mercantile Exchange will delay the opening of open outcry trading this Thursday from 10 a.m. ET until 10:51 a.m. ET. Trading and clearing on Nymex’s electronic systems will be closed during that period. In response to Nymex’s late opening Thursday, the EIA announced Friday that it will delay the release of its Weekly Natural Gas Storage Report from 10:30 a.m. ET to 11:15 a.m. ET.

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