Next-day gas prices for Wednesday delivery traded about a dime lower in Tuesday’s trading. Scattered gains in the Gulf and San Juan Basin were unable to counter broad but not terribly deep losses at most market points, and the overall market fell 18 cents to average $3.22.

Power loads at eastern population centers were forecast to decline, and next-day power prices mostly held steady. Futures prices staged a double-digit rebound as temperature forecasts turned a little cooler. At the close February had risen 14.8 cents to $2.943 and March had added 13.7 cents to $2.932 February crude oil continued its losing ways falling 18 cents to $45.89/bbl.

Next-day gas at New England at Mid-Atlantic points led the day’s losses as forecast power loads were seen declining from New England deep into the Ohio Valley. ISO New England predicted that peak power Tuesday of 19,840 MW would decline to 19,760 MW Wednesday and drop to 19,080 MW Thursday. The New York ISO forecast peak load Tuesday of 22,859 MW would slide to 22,689 MW Wednesday before falling to 22,304 MW Thursday. Across the broad PJM footprint from Delaware to Ohio, peak power Tuesday of 43,565 MW was seen dropping to 41,947 MW Wednesday and 41,050 MW Thursday.

At the Algonquin Citygates next-day deliveries fell 67 cents to $11.49, and packages at Iroquois Waddington tumbled $2.56 to $7.68. Gas on Tennessee Zone 6 200 L skidded 60 cents to $10.90.

Next-day gas in the Mid-Atlantic lost half its value. Gas headed for New York City on Transco Zone 6 dropped $5.10 to $4.81, and deliveries to Tetco M-3 were seen down 13 cents to $4.23.

Gas in the Marcellus was mostly lower. Gas on Tennessee Zone 4 Marcellus shed 32 cents to $1.12. On Dominion South gas changed hands down a penny at $1.60.

Next-day peak power across the East was mostly steady. IntercontinentalExchange reported Wednesday peak power at the ISO New England’s Massachusetts Hub rose 59 cents to $95.47/MWh and peak power at the PJM West terminal added $1.29 to $47.92/MWh.

Wednesday gas deliveries at Midwest and Great Lakes points eased as temperatures showed a rising trend. Forecaster Wunderground.com predicted that the high Tuesday in Minneapolis of 16 would reach 22 Wednesday and 34 on Thursday, 13 degrees above normal for mid January. Milwaukee, WI’s Tuesday high of 18 was seen rising to 24 Wednesday and 34 by Thursday. The seasonal high in Milwaukee is 29. Chicago’s high Tuesday of just 17 was expected to rise to 19 Wednesday and reach 29 by Thursday. The normal high in the Windy City, though, is 31.

Gas for delivery Wednesday on Alliance fell 4 cents to $2.97, and deliveries to the Chicago Citygates came in at $2.96, also down 4 cents. On Consumers, Wednesday packages retreated 4 cents to $2.98, and gas at Demarcation dropped 11 cents to $2.91. On Michcon, Wednesday gas changed hands at $2.94, down 2 cents.

Temperatures were expected to remain chilly, according to the National Weather Service in Chicago. “Temperatures have topped out in the middle teens to near 20 degrees across the area this [Tuesday] afternoon. However…temperatures will likely fall off quickly with sunset this evening…with mainly clear skies…light winds and snow cover under the surface high.

“Although some higher level cloudiness will likely increase across the area later tonight…it appears that temperatures in most areas will fall several degrees below zero…especially outside of Chicago. In spite of these very cold temperatures…very light winds tonight under the surface high will keep wind chills warmer than -20.”

Futures traders acknowledged the day’s advance and see it related to changes in near-term outlooks, but the forecasts are not strong enough to lift prices over $3, they said. Even with this week’s expected storage draw north of 200 Bcf, erasure of the year-on-five-year storage deficit is likely, and the market will be forced to stare down production levels about 5 Bcf/d higher than last year.

In its Tuesday morning six-10 day outlook, WSI Corp. said it expects less warmth. “This is due to the day shift across the West and also a function of model trends over the East. Forecast confidence is average at best as medium-range models display numerous technical differences with the timing and track of storm systems across the nation.

“There are risks in either direction given the model spread and storm track. The Northeast and the West have a slight risk to the colder side, while the Northern Plains, Midwest and the South may run warmer.”

In the near term, power generators across PJM are not likely to see much in the way of wind generation. “Cold high pressure will engulf a good portion of the power pool during the next couple of days. However, a northeast flow and broad area of low pressure off the Southeast coast will lead to a period of light snow and wintry mix across the lower Mid Atlantic tonight into Wednesday. Minor snow and ice amounts are expected.

“High pressure may support fair weather and a moderating trend during the end of the week into the start of the weekend. Light and variable wind generation is expected during the next couple of days. A westerly breeze should provide a boost to wind generation during Thursday and another spike of generation is possible during Friday night into the weekend,” WSI said.

Despite the day’s gains analysts are looking for prices to drop another 20 cents. “[A] consensus appears to favor above-normal [temperature] trends beginning in a few days and extending at least through next week. Some 30-day views are advising normalization,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Monday. “As a result, a supply surplus against average levels will likely be established next month following a brief expansion of around 30-35 Bcf within Thursday’s release. Looking out later this month and into February, we still see production as an increasingly bearish item that has not been fully discounted, in our opinion.

“Despite a sharp cut in the rig counts, we don’t expect these reductions to have much impact on production for several months. Once the ongoing cold spell passes in a few days, we see increasing pressure on physical trade that will be acting as a drag on front-month futures relative to deferred contracts. We see a contango established along virtually all parts of the curve, a development that should continue to encourage investment-type entry in to the short side while at the same time providing incentive for additional short hedges. All factors considered, we are maintaining a bearish stance as we view our $2.60 target as high probability of some 85-90% within about a one week- 10-day time frame.”