The NYMEX November natural gas futures contract dropped 10.2 cents to a $3.855/MMBtu settlement Wednesday on expectations of a second weekly triple-digit storage injection and forecasts for mild weather into late October.
Most analysts polled by Platts are expecting an injection of 106-110 Bcf in the Thursday gas storage report issued by the US Energy Information Administration.
Such a build would be slightly lower than the previous week's 112 Bcf injection, but would be much higher than the 91 Bcf EIA reported this time last year, as well as the five-year average build of 84 Bcf.
The market is "zoned in on $3.85," with resistance at $4.15-$4.20/MMBtu and support at $3.75-$3.80/MMBtu, said analyst Stephen Schork of The Schork Report.
"It's going to take something like an early cold snap or a late Indian summer to break out of this range. But we are obviously headed into winter as well," Schork said. "Steady as she goes."
The anticipated injection and the forecast over the next 10 days "are driving prices lower again," said Gene McGillian, a broker at TFS Energy Futures. "But every day we get closer to the winter heating season, and we see a reluctance for many to get further short."
The eight- to 10-day outlook from the US National Weather Service was little changed on Wednesday, calling for above-average temperatures in most of the US save for a small band of average temperatures in the northern tier states.
The contract's move lower is "partly moderating temperatures," said analyst Jay Levine of enerjay. "No heat and no cold equals a down market. We're squarely in the middle of this trading range between $4 and $3.75."
November traded Wednesday in a range of $3.837-$3.947/MMBtu.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
