Futures Wednesday continued to bounce off the walls of the trading range that has been in place for the last two weeks, and traders said that it would take an unexpected weather event or unusual storage figure to get the futures moving one way or the other. November futures fell 6.7 cents to $6.777 after trading as high as $6.970 in electronic trading and December fell 11.1 cents to $6.977. December crude oil tumbled $5.43 to $66.75.

New York floor traders see the market “at value.” According to Integrity Energy trader John Woods, “The market is just trading sideways. It gets to the $6.90s; it looks like it’s going to $7, and it ends up in its range from $6.55 to $6.95. We need weather,” he said. “The market is fixated on this trading range, and it has been traded so many times someone would be hard-pressed to put in a stop loss order expecting the market to break beyond the range.”

One factor that could break the market out of its lethargy would be an inventory report far removed from expectations. “If you get some crazy [Energy Information Administration] number that will do something for the market,” said Woods. “You have to get something totally out of the norm, either way, but plus-or-minus 5 Bcf either way isn’t going to make much difference.”

Crazy or not, a Reuters poll of 22 industry observers revealed an expected injection in Thursday’s 10:35 a.m. EDT release of inventory figures to show a build of 76 Bcf. A similar Bloomberg survey of 13 analysts showed a median 75 Bcf build. These figures will be compared to last year’s 60 Bcf build for the week and a five-year average injection of 62 Bcf.

Others aren’t so concerned with storage. “Storage is a big nonevent, I don’t know why we pay attention to it,” said Ed Kennedy, senior vice president at Hencorp Becstone Futures, Miami. “It gets filled every year. Whatever the utilities decide they want in storage is what the [final] number will be. You can shut in production like you did in 2005 [post-Katrina] and you will fill storage. Why pay attention from week to week?” he asked.

Weather-wise Kennedy noted that “there will be snow in Tennessee, but that will be a short term event. Looking out to November most independent forecasters are saying above normal a couple of degrees, no great shakes, but you are talking Chamber of Commerce weather with slightly reduced electrical demand. That to me means we are going to stay in the $6.50 to $7.50 trading range.”

Even if there were a prolonged bout of cold weather “buyers will go to the cash market, and that will be reflected to a greater or lesser degree in the futures. Something developing in the tropics is a long shot,” he said.

One factor that doesn’t seem like much of a long shot is a short-term incursion of cold weather. “Temps will be falling to below average across the eastern half of the U.S. in the coming days and will stay there for the weekend,” said private meteorologist John Dee in a morning report. He added that a “reinforcing shot of cool air” is likely to send temperatures even more below average in the eastern United States for early next week. In his forecast he says temperatures in the West will warm to above average in the coming days and stay there into much of next week. “The cooler than average temps in the East will lead to higher than average demands for heating energy across all of the Northeast U.S. and most of the Midwest, although it is too early in the season to be generating demand levels that are too substantial.”

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