Physical natural gas slipped lower in Monday's trading for Tuesday deliveries as traders find themselves staring down the barrel of a near-term market environment that may feature a series of triple-digit additions to storage and elimination of the year-on-five-year storage deficit.

Early reads call for a mild summer, and for the moment the bulls can't get a break. The overall physical market fell 2 cents to $2.31 with the Northeast adding 6 cents, the Gulf, Midwest and Midcontinent dropping about a nickel, and the Rockies and California nearly flat. Futures prices slumped lower creating a bearish "gap" on the daily bar charts.

At the close May had fallen 4.1 cents to $2.490, and June was lower by 5.4 cents to $2.514. June crude oil lost 16 cents to $56.99/bbl.

"I'm surprised the market is this weak going into the summer," said a New York floor trader. "When trading is this slow, though, it's almost a nonexistent event. It's the end of April and kind of a dead period anyway. I'll have to see what happens with the June and July contracts before I am convinced the market is going much lower.

"History will tell you that going into the summer you don't want to be too short. I know there's a new factor out there because there is so much supply. It's amazing how much supply is supposed to come online in the next 18 months, and maybe we are in a new price regime, and certainly the next six to eight weeks will tell us. If weather comes in and doesn't affect the market, then we know it's a supply-demand problem."

Followers of the Market Profile are not convinced prices are headed lower.

"We opened the week lower, and we have a higher weekly target, the value area between $2.577 and $2.525. The market is showing signs that it will eventually test those targets," said an analyst with FC Stone Latin America LLC in Miami.

"Speculators are selling and they probably sold [Monday]. One thing to consider is [Tuesday] we have contract expiration so you could see a lot of short covering” then.

In the physical market, New England prices slumped as temperatures Tuesday in the Northeast were expected to rise. Forecaster predicted the high Monday in Boston of 56 would rise to 61 Tuesday before easing back to 56 on Wednesday. The normal high in Boston during late April is 60. New York City's 63 high on Monday was seen rising to 68 on Tuesday before hitting 72 Wednesday. The normal high this time of year is 65.

Gas at the Algonquin Citygates fell 12 cents to $2.83, and deliveries to Iroquois Waddington shed 11 cents to $2.75. Gas on Tennessee Zone 6 200 L skidded 19 cents to $2.74.

Marcellus quotes were firm. Deliveries to Millennium added 12 cents to $1.39, and packages on Transco Leidy were quoted 13 cents higher at $1.47. Deliveries on Tennessee Zone 4 Marcellus gained 14 cents to $1.29, and gas on Dominion South came in 7 cents higher at $1.50.

Gulf quotes were lower as well. Tuesday gas on Columbia Gulf Mainline shed 8 cents to $2.41, and gas at the Henry Hub fell 8 cents to $2.48. Parcels on Transco Zone 3 were off a nickel to $2.46, and gas at Katy changed hands three pennies lower at $2.49.

In earlyNGI bid week trading, Chicago Citygates were seen at $2.48-2.51, and El Paso Permian changed hands at $2.21-2.31. Opal was quoted at $2.24-2.31, and PG&E bid week saw a range of $2.81 to $2.91.

Sunday overnight weather models prompted forecasters to call for a milder near-term outlook. "The most substantial change in the forecast from Friday comes in this period, which is a bit warmer from the Midwest to the East,” said MDA Weather Services In its Monday six- to 10-day outlook. “Above-normal temperatures are now expected to span from the central Rockies to the Midwest, and into the East as well beyond mid-period. This adjustment accounts for a disturbance over Canada, which will help to advect warmer temperatures downstream.

"An upper-level system will also aid in this transport of warmer air into the central U.S., while allowing for the belows in the South form the one- to five-day to fade in intensity with this period. Cooler risks are noted in the Midwest as a ridge builds into the Gulf of Alaska, particularly beyond mid-period." Other risks include a cooler West late as a trough deepens aloft, the forecaster said.

In addition in its automated weekend six- to 10-day outlook, the National Weather Service showed a much more expansive pattern of above- to much-above normal temperatures. The entire nation is shown as above normal, with minor occurrences of normal to below normal temperatures in South Texas and Florida. Friday's forecast showed an above-normal West but below-normal temperatures east and south of a sinuous arc extending from eastern Michigan to Tennessee to Central Texas.

Should the opening weakness continue, it may signal a new technical regime bringing still lower prices. United ICAP technical analyst Brian LaRose said last Friday that in order for the market "to signal the down trend is still intact bears need to crack both $2.475 and $2.426-2.409. If they can make this happen, a test of the $1.902 low would be on the table.

"However, as long as the bulls can prevent natgas from taking out these support candidates, bottoming action cannot be ruled out. Though to make a case for a sustainable recovery, bulls would need a close above $2.736-2.759-2.777.