October futures eased fractionally in active trading Thursday as the government released figures showing a lower-than-expected increase in inventories. The ensuing price rise, however, was seized upon by eager sellers and prices retreated.

The storage report by the Energy Information Administration (EIA) did give traders and analysts a better idea how deep inventories are likely to be going into the winter heating season, but the market seemed content that no pricing adjustments were necessary. The EIA reported 55 Bcf was injected for the week ended Aug. 26, and that was somewhat below expectations, but after the day’s trading prices were slightly lower.

October eased 0.4 cent to $4.050 after trading as high as $4.130 and November slipped 0.7 cent to $4.166. October crude oil added 12 cents to $88.93/bbl.

Traders were generally surprised at the storage figure. “The 55 Bcf build was less than expected and below the 60 Bcf five-year average gain, so it should provide some added short-term support for prices,” said Tim Evans, analyst with Citi Futures Perspective in New York. “It’s not clear exactly why the shortfall occurred, but lower pipeline imports or higher-than-expected demand for the week are possibilities.”

At present, inventories stand at 2,961 Bcf with nine weeks left until the October end of the injection season. To reach 3,500 Bcf, builds of just under 60 Bcf weekly would be required, and to make it to 3,750 Bcf, additions of more than 87 Bcf per week are necessary.

Going into the report estimates were generally higher. IAF Advisors in Houston calculated an increase of 58 Bcf, and a Reuters poll of 23 traders and analysts showed an average gain of 61 Bcf with a sample range of 51-78 Bcf. Industry consultant Bentek Energy predicted a build of 56 Bcf.

In a report prior to the release of the data Bentek correctly said it thought that most of the risk in its estimate lay toward a lower number. “A smaller injection or even a net draw in the Producing Region is likely as Texas withdrawals continue to be strong. The Electric Reliability Council of Texas (ERCOT) asked consumers to reduce their electricity use during the last days of the storage week, including an emergency day on Aug. 24. During the week ended Aug. 5, EIA reported the larger-than-expected draw in the Producing Region of 21 Bcf. ERCOT had four emergency days during that week.”

Supply bulls got a boost with reports that evacuation procedures are under way in the Gulf of Mexico as a sub-hurricane storm could impair operations (see related story).

The National Hurricane Center (NHC) in a 2 p.m. report said a broad area of low pressure was moving to the northwest and had upgraded the probability of it becoming a tropical cyclone to 80% from 70% earlier Thursday.

It is possible that the storm could move through a heavy concentration of oil and gas platforms off the Louisiana and Texas coasts and potentially lessen supplies from the Gulf, which accounts for about 30% of U.S. oil supply and 12% of its gas.

The storm would be named Lee and could dump heavy rains from the Florida Panhandle to a parched Texas. NHC Director Bill Read said, “We’ve got a huge area of moisture, we’ve got a developing wind field. We’re probably going to see some tremendous rain amounts and the corresponding flooding that goes with that.”

NHC also reported Tropical Storm Katia was grinding west in the Atlantic 930 miles east of the Leeward Islands with winds of 70 mph and heading to the west at 18 mph. NHC projections show it heading to the southeast U.S. coast. A third system north of Bermuda was given a 50% chance of development.

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