As weather forecasts remained chilly, traders on Tuesday conceded weather-driven natural gas futures price momentum to the bulls as the February contract traded higher for a fourth consecutive session. After carving out a high of $7.600, the prompt month settled at $7.597, up 27.8 cents on the day and $1.363 higher than last Wednesday’s $6.234 close.

“The point is the market is starting to believe that we are going to actually have some winter this winter, but it might be coming a little too late to have any real damaging effect on record storage levels,” said Steve Blair, a broker with Rafferty Technical Research in New York. “Last week, the market tried to test the lower end of the $6 region and ended up failing miserably. Late last week, a couple of the weather services were flipping their forecasts into February to colder than they originally expected. That’s why we saw that 56.2-cent pop higher in February natural gas on Friday. On Sunday, most of the other weather services were getting on the cold weather bandwagon, which helped the contract sustain its strength early this week.

“On Monday, almost every state in the National Weather Service’s temperature table was experiencing below normal conditions. There were less than a handful of above normal areas…and most of those were in Alaska. The prospects of 50s, 60s and 70s in most high gas-demand regions are no longer in the forecast. It will be interesting to see what the weather picture looks like next week.”

Focusing on the futures market, Blair said that while the immediate front months were up substantially Tuesday, most contracts were either slightly up or down. “I think this reflects the market’s view of winter’s remaining time line,” he said. “Typically at this point it is too late to really get a whole lot of sustained cold weather to drain down record supplies of storage. The market still believes we are going to have a boatload of gas going into the March injection season. By looking at the price structure of the market, people don’t appear to be too concerned about supply in the future.”

Looking ahead in the short-term, Blair said the first resistance is at $7.600, followed by $7.700. “I think the market is going to play itself back and forth a little bit and wait for the next round of weather reports to come out,” he said. “We will also have to see what kind of withdrawal we are going to get this week. A lot of people are expecting a pretty significant pull, which could also be partially responsible for this week’s run-up. If we get a few pretty good withdrawals in a row, it could lead to price spikes. However, I don’t think those spikes are sustainable at this point.”

Top traders have noted that the spot February contract has inched ahead of the March contract, a market inversion placing a price premium on immediately available supplies and at least a short-term bullish indication. In Monday’s trading, February futures settled at $7.319 and March closed at $7.311. On Tuesday, that gap widened with the March contract closing out at $7.562, which was 3.5 cents lower than February.

Jim Ritterbusch of Ritterbusch and Associates said that this situation “implies enough strength in nearby demand to easily overshadow current ample supply levels. While we remain skeptical of the ability of this front spread inversion to be sustained, we do feel that a swing back to a carrying charge will require a significant shift in the temperature outlooks.”

That may take a while. Tom Skilling, chief meteorologist at WGNTV in Chicago forecasts highs in the mid to upper 20s and low 30s this week, but by Monday the high in Chicago is only forecast to make it to 14 degrees. The normal high this time of year is 32 degrees.

Consistent with that forecast is AccuWeather’s six-to-10-day outlook, which calls for colder than normal temperatures across the entire U.S. all the way to the Nevada-California border. Only California, portions of the Pacific Northwest, and the southernmost tip of Florida will be normal, the forecaster said.

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