The American Gas Association reported a 95 Bcf injection into the nation’s natural gas storage facilities last week, which compares to a 72 Bcf injection during the same week a year ago. The injection came in slightly above consensus estimates around 85 Bcf and should be a bit of a reality check for traders caught up in the hype surrounding the impact the terrorist attacks might have on international crude supplies. However, the New York Mercantile Exchange remains closed and there was still no word yesterday evening on whether the exchange would attempt to open its doors on Thursday (see related story).

The storage news likely would be considered bearish by futures traders and would serve to help offset any bullish reaction to Tuesday’s catastrophe. However, Nymex “look-alike” contracts on EnronOnline (October Nymex swaps) rose into the mid $2.50s , according to traders.

The AGA reported that there remains a significant amount of natural gas in storage currently. With 2,667 Bcf of working gas in storage, levels as of Sept. 7 were 409 Bcf higher than at the same time last year and 235 Bcf higher than the five-year average. The AGA reported a 60 Bcf injection in the Consuming Region East where working gas levels stand at 1,502 Bcf or 82% full. There was a 25 Bcf injection in the Producing Region and a 10 Bcf injection in the Consuming Region West where storage stands at 85% full.

Meanwhile, Tropical Storm Felix apparently is no longer a threat to the coast. It is well out in the Atlantic and expected to turn toward the northeast. Tropical Depression eight, however, needs to be watched by Florida and Gulf of Mexico interests, the National Hurricane Center said in its 5 p.m. report. The depression was about 230 miles west-southwest of Naples, FL, and “meandering” around with little overall movement expected before morning. A gradual move toward the northwest is possible. Maximum winds increased to 35 mph, and a further increase in strength is likely in the next 24 hours, the NHC said.

“Storm-related shut-ins in the Gulf of Mexico could offset this bearish news, although Tropical Depression eight doesn’t look all that dangerous at the moment,” said Tim Evans of Pegasus. “A bigger issue for the market may be the speculative short interest here, with some traders opting to cover due as much to the general financial chaos as for any specific fundamental reason. October shorts in particular could find themselves short of time to trade, depending on when Nymex reopens. The timing of that reopening may prove influential in the short run, with the $2.53 high from last Friday as a possibly significant pivot price. Past that level we recall heavy failed support in the $2.88-2.95 range that is likely to turn back an initial support.”

Crude oil prices, meanwhile, fell off three-month highs on the International Petroleum Exchange in London after reassurance from OPEC that it would keep supplies flowing.

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