An honest-to-God weak injection, well below projected levels, on today’s weekly storage report has left NYMEX…pretty much where it started. Two weeks of steady price rise led up to a quick spike this morning, but since the report was released at 10:30am EST NYMEX has dribbled downward. There should be a bit of a pickup, and we’d expect NYMEX to end the day around $4.80.

Some people are saying that the country has been in a worlds of hurt since the economic collapse in 2008, but for July, 2010, NYMEX was a world of shorts. We started the month just under $5.00, a tailoff after a week at $5.20 back in June, and clearly nobody thought that would last. After a fairly precipitous drop, July has seen a slow and steady progress upward, almost entirely unaffected by storage reports, economic reports, or anything else.

Most likely, we’ve seen two straight weeks of short covering: investors who bet that the $5.00 price that opened the month wouldn’t hold, and invested accordingly, then gradually bought their way out as prices bottomed and started to inch up. If you’ve bet short, it all becomes a game of chicken as prices rise and the month’s close gets closer and closer: at what point do you settle for your gain…or take your lumps…and get out? This appears to have been the NYMEX story for July.

In other words, the price of gas right now has nothing to do with the price of gas. It’s all about investors trying to outsmart each other. As we’ve said before, the fundamentals have remained unchanged since last year: plentiful supplies, low demand (with occasional weather-related spikes), weak economny. Based on supply, prices are high no matter where they are in the up-and-down fluctuation that has marked NYMEX all year. Storage has fallen off since last year’s records, but let’s remember: front-month futures were selling for almost a full dollar less at this time last year, with spot prices even lower. Right now, there’s very little to suggest that banking your gas now will gain you anything other than a lot of unnecessary storage fees. The fact that injections continue at near-record levels despite this says that there’s plenty of natgas to go around.

Meanwhile, NYMEX will continue to play its games. That’s the long and the short of it.