Gas for delivery Wednesday was unchanged in Tuesday’s trading as modest gains at a few Northeast points along with firm West Texas pricing was easily offset by the remainder of market points, which moved within a few cents of unchanged. The NGI National Spot Gas Average was $3.03, up 2 cents.

Futures trading was more volatile, with the June contract taking a double-digit hit as government weather forecasts called for some attenuation of summer heat. At the close June had fallen 11.1 cents to $3.219 and July was off 11.2 cents to $3.312. July crude oil gained 34 cents to $51.47/bbl.

A California trader sees the market in something of a neutral zone. “It’s hot out here, but natural gas is doing its usual shoulder season search for the bottom,” said a broker with a Northern California firm. “The power business is living on hydro right now, but like all hydro it will be winding down by July 4 like it always does.

“Natural gas is in a nowhere zone pivoting around $3.30. The RSI [Relative Strength Indicator] is just around 50. Natural gas needs to blow down to the support at $3.10. I’m buying natural gas on breaks but it’s out in 2018.”

“I tend to think the natural gas market is not as dire [oversupplied] as people make it out to be,” said David Thompson, vice president at Powerhouse LLC, a Washington DC-based trading and risk management firm.

“The possibility of a market correction taking out the low of $2.60 from March is highly unlikely. Given where we are on the calendar even with a less-than-expected [warm] summer, we are still going to be getting into hot weather and cooling demand. I think it will take warmer than currently expected weather to get us above $4, and break out of the $3s, but I don’t think we’ll see a test of that February low.

“I’m modestly bullish,” said Thompson.

Natural gas opened about 5 cents lower Tuesday morning at $3.28 and kept on going from there as traders factored in moderating temperatures and a short-term loss of demand.

Overnight weather models showed less near-term cooling load. “[Tuesday’s] six-10 day period forecast is cooler in the East, especially Northeast, whereas slightly warmer Northwest and Southern Plains,” said WSI Corp. in its morning six-to 10-day outlook. [Continental United States population-weighted cooling degree days] are down -3.6 to 27.1 for the period.

Cooler risks continue to be placed over the East if models trend even stronger and farther southward, displaced with an upper-level trough forecast to push across the Great Lakes and Northeast during the latter half of the period.

Near term, the National Weather Service (NWS) forecasts a lessening of both heating and cooling load for major East and Midwest energy markets. For the week ending May 27 New England is expected to see a combined 41 degree days (DD) or seven fewer than normal. New York, New Jersey and Pennsylvania are expected to deal with all of 22 DDs, or 21 fewer than normal, and the greater Midwest from Ohio to Wisconsin is predicted to experience 35 DDs, or 20 fewer than its normal seasonal tally.

Physical traders Tuesday short term had to deal with a greater decrease in demand than a loss of production. “Production is down about 0.28 Bcf/d day/day (though with maintenance season still very much in effect revisions are still frequent),” said industry consultant Genscape in a morning report to clients. “The bulk of today’s drop comes out of the Permian where Transwestern receipts from Enterprise’s South Eddy plant dropped to zero. Imports from Canada are holding steady around 5.4 Bcf/d as flows on Vector inch back up toward pre-maintenance levels. Prior to the outage it was exporting about 1.15 Bcf/d to Dawn. Current volumes are up to around 0.85 Bcf/d.)

“Total demand is down about 0.5 Bcf/d day/day. Exports to Mexico have been slowly inching up with hot temperatures in northern Mexican states, and LNG exports are holding steady around 2.2 Bcf/d. But domestic demand is down. Even though some areas of the country are still registering heating loads, those numbers are outweighed by lower power burns. Genscape’s proprietary power estimate for today is at 24.2 Bcf/d, a 0.9 Bcf/d drop from Monday.”

In physical trading most major trading points came in flat to a little higher. Deliveries to the Algonquin Citygate added an uncharacteristic 2 cents to $3.02 and deliveries to Dominion South rose 3 cents to $2.77. Gas bound for New York City on Transco Zone 6 climbed 3 cents to $2.93.

Gas at the Chicago Citygate was flat at $3.13 and parcels at the Henry Hub were quoted down a cent. Deliveries to El Paso Permian came in a nickel higher at $2.89.

Gas at Opal changed hands at $2.90, up 2 cents and gas priced at the SoCal Border Average rose 3 cents to $2.99.