After plunging more than $1.00 on Monday, natural gas futures were down sharply again early Tuesday despite a large day/day production decline. The June Nymex futures contract was trading 35.6 cents lower at $6.670/MMBtu at around 8:50 a.m. ET.

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Traders appeared to be brushing off the precipitous drop in output, perhaps because most of the decline was likely tied to maintenance. After showing strong numbers over the weekend, the top day estimates reflected in Wood Mackenzie’s pipeline production data pointed to a roughly 1.2 Bcf/d day/day drop in output to around 94.9 Bcf/d.

Northeast production was most heavily impacted, with volumes down around 660 MMcf/d, Wood Mackenzie said. The majority of the decline occurred in Pennsylvania.

Rockies output was down around 255 MMcf/d, weighted to Wyoming. Pipeline work was scheduled along the Rockies Express, Kern River and Tallgrass Interstate Gas pipeline systems. Production also was down at the Opal processing plant with no posted notices, according to Wood Mackenzie.

With output expected to recover once the various maintenance events conclude, traders also looked to the latest weather models for additional direction. Forecasts, however, were left mostly intact overnight, still showing strong demand for the next few days, but then moderating afterward.

NatGasWeather noted that after aggressive buying for five straight sessions that sent prices surging to $9.00, nearly all gains were wiped out the past two sessions. The firm said the gas market often overextends higher and lower. 

After reaching a bit too high late last week, prices collapsed on Monday, “giving bears rare momentum. For today’s trade, will bulls buy the dip or can bears drop prices below $7?” the firm asked.

EBW Analytics Group noted that Monday’s $1.00-plus decline pushed the June Nymex contract through key technical support at the 20-day simple moving average for the first time in almost three months. The technical breakdown, it said, is suggestive of further weakness ahead. Softening near-term fundamentals also support a continued sell-off.

“Key support just under $6.50 may be a threshold figure that, if broken, may be a sign of weakening bullish near-term momentum,” EBW senior analyst Eli Rubin said. “Any near-term downtrend, however eye-popping, has not loosened the seasonal fundamental trajectory or altered the long-term market outlook. While further amplified volatility remains likely, the fundamental natural gas outlook remains robust and could lead to another turn higher this summer in our most-likely scenario.”

Crude oil futures also were lower early Tuesday, off about 39.0 cents to $102.70/bbl. RBOB gasoline futures were down about 3.6 cents to $3.605/gal.