Propelled by a smaller-than-expected storage injection figure and fueled by concerns over a tropical depression in the eastern Caribbean Sea, natural gas futures jumped to a new two-week high Thursday as holders of recently established short positions headed for the exits. That short-covering was enough to boost the November contract to a $2.47 high en route to its $2.414 close, a 9.4-cent advance for the session.

According to the American Gas Association, 66 Bcf was injected into the nation’s gas storage facilities last week, lifting inventories to 88% of full capacity. The refill was immediately deemed bullish as it fell well-below both consensus estimates in the 80-90 Bcf range as well as last year’s 78 Bcf injection level. Storage now stands at 2,914 Bcf, or 434 Bcf above the year-ago level.

As of yesterday evening the National Hurricane Center was issuing warnings on Tropical Depression 11 located near the Windward Islands in the Eastern Caribbean Sea. Based on information last night, the NHC conservatively called for only a slow strengthening over the next few days as the storm moves on a course to the west/northwest. However, the NHC also warned that because there was some disagreement among its various forecasting models, the storm could strengthen more significantly or weaken into a tropical wave during that same time period.

Also of bullish influence yesterday, traders agreed, was the rally in related energy prices. Crude oil led the way, gaining 2.5% to close at $22.63 amid fears that OPEC would go back on its decision last week and cut oil production. Propane finished 1.3% stronger at $0.3925.

By virtue of its post-AGA spike, the November contract filled in the $2.37-43 chart-gap created by the lower open on Sept. 24. Further gains will look to fill in another gap on the daily chart at the $2.53-59 level, technicians agree. However, the body of evidence does not favor a sustained move to the upside, and traders believe that November futures prices will test new lows at $2.14, with a possible extension down to October’ $1.83 final settlement.

The New York Mercantile Exchange yesterday announced that it anticipates the return to normal trading hours on November 5th. In the meantime, the exchange said natural gas will trade in the pit from 10 a.m. to 2:30 p.m. EST each business day. Access trading will be held Sundays beginning at 7 p.m. and Mondays through Thursdays beginning at 3:15 p.m. and will run through 9 a.m. the next morning.

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