Monday trading for Tuesday delivery of physical gas was almost the direct opposite of Friday, with New England points pounded by multi-dollar declines and the rest of the country experiencing healthy advances, as screen prices still maintain a premium to physical prices. With only a few exceptions, all points experienced gains.

Overall, the market dropped 8 cents, but if the cascading New England prices were factored out, the market showed a gain of a dime.

Futures continued their weather-driven march lower, with analysts expecting the year-on-year storage deficit to be eliminated by the next three storage reports. At the close, January had skidded 20.7 cents to $3.595, and February was down by 20.0 cents to $3.623. Henry Hub physical gas settled at $3.50, and January crude oil imploded $2.79 to $63.05/bbl.

New England prices fell hard and fell often as above normal temperatures were expected Tuesday. The weather is likely to change as a storm Tuesday should lead to increased heating load. Wunderground.com predicted Boston’s high on Monday of 24 would soar to 50 on Tuesday before receding slightly to 47 Wednesday. The normal high is 44 in early December. New Haven, CT was expected to see its 26 high on Monday jump to 46 Wednesday and moderate to 44 by Wednesday; the seasonal high is 42.

Gas for Tuesday delivery at the Algonquin Citygates fell a steep $7.08 to $5.06, and gas at Iroquois Waddington was flat at $4.04. Gas on Tennessee Zone 6 200 L dropped $7.85 to $4.73.

Trading as Boston is expected to confront stormy conditions by mid-week.

“Boston faces a disruptive storm and travel woes Tuesday into Thursday,” said AccuWeather.com meteorologist Andy Mussoline. “Wind-swept rain, coastal flooding and strong wind gusts may not only slow ground and air travel in the region, but can cause sporadic power outages and property damage.

“Gusts between 50 and 60 mph are possible later Tuesday and Tuesday night, [but] less wind is forecast Wednesday into Thursday.” No snow is forecast for Boston, as forecasters say there is sufficient warm air in place but north and west of the city, but “stubborn cold air will allow a wintry mix to last longer.”

Curiously, transportation constraints are as tight as ever on Algonquin. The company said 89% of out-of-path nominations west of Stony Point, all nominations in excess of firm transportation west of the Southwest Compressor Station, and 90% of out-of-path nominations west of Cromwell would be curtailed in a mid-day posting Monday to its website.

In the Mid-Atlantic, quotes rose for Tuesday deliveries. Gas bound for New York City on Transco Zone 6 rose 18 cents to $3.72, and deliveries to Tetco M-3 shed 23 cents to $3.45.

Midwest market centers posted gains. Gas on Alliance for Tuesday was seen 13 cents higher at $3.70, and gas at the Chicago Citygates added 6 cents to $3.60.

On Consumers, next-day packages changed hands 6 cents higher at $3.77, and gas on Michcon was quoted 13 cents higher at $3.82. Deliveries to Demarcation added 10 cents to $3.55.

Producing regions enjoyed market gains. Gas on Transco Zone 1 rose by 9 cents to $3.39. Quotes for next-day deliveries to the Houston Ship Channel were seen up 14 cents to $3.39, and gas at Katy tacked on 14 cents to $3.42. On NGPL S TX, next-day gas changed hands 9 cents higher at $3.38.

Futures traders acknowledged the unsupportive weather but cautioned that further declines may be limited.

“So far winter only showed up for a couple of weeks in mid-November, but beyond that it’s been almost balmy,” said ICAP Energy Vice President Drew Wozniak. “I do, however, think that as traders remember what happened in Q1, any more moves to the downside are going to encounter increasing resistance.”

Market bears noted that weather forecasts have changed little, and at the moment there is no convincing evidence that cold, Canadian air will be working its way south later in the month.

“We still expect the next area of focus regarding weather patterns will be what occurs after Dec. 21 as the Pacific jet stream attempts to shift offshore, allowing opportunity for the pool of very cold northern Canadian air to push southward toward the U.S.,” said Natgasweather.com in its Monday forecast. “The weather data over the weekend did not convincingly show colder temperatures will move into the U.S. going into the last week of December, but they did continue to show the potential still exists.

“This may not be enough as the markets will also likely note national eight-14 day outlook maps are still showing plenty of red/warm colors, and this could lead to some disappointment that cooler colors have yet to start showing up.

“With weather patterns not looking nearly cold enough to meet what is supposed to be very strong demand for this time of year, weather sentiment will likely continue to be viewed as overall bearish apart from the brief cool-down early this week due to a relatively chilly weather system sweeping through. This, of course, could change if colder weather patterns begin to look more promising for late December.”

Mike DeVooght of DEVO Capital had some thoughts on the petroleum markets and when the pervasive selling might come to an end. Although petroleum and natural gas are not directly substitutable commodities, lower petroleum prices leading to an overall lower energy cost environment will not go unnoticed by natural gas.

“In regards to when this current break will run its course, it is difficult to predict,” he said. “But we still feel that between now and year-end, the market will remain on the defensive. The funds are still carrying a large long position, and we have not seen the producer selling we would expect to see at the bottom. The funds that are still long probably have positions that are tied to indices, so they will not liquidate until year-end, if they do, as market allocators bail on their long energy allocations.

“We feel three to six months from now, the market outlook will be much different than it looks today. We will see a production slowdown and demand will either increase or remain about the same. But either way, we will see a better fundamental outlook in the future. So in the short term, we could very well see the energy market remain on the defensive. But we would not rule out a short-covering rally at any time,” DeVooght said.