Physical natural gas nationally was able to advance 2 cents to an average $2.58 in trading Tuesday for Wednesday delivery. Most points fluctuated within a couple of pennies but eastern locations proved the exception by advancing collectively on average by a nickel. Next-day peak power was mixed nationally and temperatures in eastern population centers were forecast well above normal.

The five days of futures gains came to an end and at the close Tuesday, June futures fell 4.1 cents to $2.780 and July was off 4.2 cents to $2.836. June crude oil reached the highest point in approximately five months and added $1.47 to $60.40/bbl.

Analysts see the natural gas market under pressure until cooling demand surfaces and tempers what are expected to be lofty additions to storage. Finance professor Andrea Paltrinieri of sees the current supply/demand balance as not bullish. "A couple of factors that are supporting the market today are production lingering around 72 Bcf due to ongoing maintenance and the first signs of increasing heat over the South at the end of forecast period.

"I also think some investors are starting to look ahead to Thursday's number, with early estimates around 72 Bcf injection. I'm definitely at a 75 Bcf injection, just a couple of Bcf above estimates, but on the bearish side again. There are some analysts talking about an injection around 66-67 Bcf (due to cooler temperatures and stronger power burns over the period), that could cause another spike in the market if true."

Paltrinieri is anticipating the next 3-4 injections to be bearish, "and until we see the first real heat wave, we could witness some pressure in prices," she said in closing comments Tuesday.

Looking beyond the next few weeks of anticipated plump injections others don't see much in the way of change to the supply demand balances. "I don't see any large changes in fundamentals of supply and demand over the next 4 to 5 months," said a Houston-based pipeline veteran.

"What's going to bring on all those shut-in wells in places like the Marcellus and Utica unless there is demand? Unless prices go up to support the cost of bringing those wells on, you don't want to bring on anything that will lower the price of what you already have flowing. I would assume it's going to be a wait and see. If we see prices up at $4 you might see some change, but I don't think that's likely," he said.

Markets are anticipatory, and the likelihood of bearish storage reports over the next few weeks should largely be in the market, However some top traders are waiting for prices to advance another 10 cents in order to initiate sales. Jim Ritterbusch of Ritterbusch and Associates says his trading stance "remains short term bearish and long term bullish while we continue to see the $2.50 level as a threshold where we will be shifting back to a bullish stance. Any accounts that may have acquired some long holdings on the brief dip to below the $2.50 mark at the beginning of last week would be advised to accept profits at current levels. As a matter of fact, we will look to begin approaching the short side of the summer contracts should July futures advance further into the $2.90-3.00 zone."

However, he admits that "this market remains quite resilient in the face of seemingly negligible support from the weather factor and a renewed expected upside acceleration in storage beyond this week's report. We are looking for a 70 Bcf injection this week that won't vary appreciably from the five-year average increase of 68 Bcf. But, while the recent steady contraction in the supply deficit against normal levels will be stalling with this week's number, we look for some triple-digit builds, possibly through the rest of this month to ultimately push this market back into new low territory."

Long term bullish might have to mean extended long term if analysts at Raymond James & Associates are correct. In a report Monday they said "North American natural gas demand growth is shaping up to be modest this year and again in 2016, as speculators wait for industrial projects to be completed and exports to become reality.

"The disappointment in demand growth isn't limited to one industrial sector, said the Raymond James report, but in all of the 'key categories' of incremental gas demand: fertilizer, ethylene, methanol and gas-to-liquids (GTL). Growth is well below expectations, with some projects now delayed and others canceled. Among other things, large GTL projects, costing many years to build and billions to finance, are being dropped in favor of smaller complexes" (see Daily GPI, May 4).

 Physical prices at northeast points were able to post double digit gains although temperatures were forecast to moderate and power prices were mixed. Forecaster predicted that the high Tuesday of 84 in New York City would slide to 68 Wednesday and climb back to 76 Thursday. The normal early May high is 68. Philadelphia's 84 Tuesday high was seen sliding to 75 Wednesday and reaching 81 Thursday.

Gas at the Algonquin Citygate added 7 cents to $2.07 and deliveries to Iroquois Waddington gained a penny to $2.97. Gas on Tennessee Zone 6 200 L rose by 18 cents to $2.15.

Packages in the Mid-Atlantic were mixed. Gas bound for New York City on Transco Zone 6 rose 5 cents to $2.81 and packages on Tetco M-3 shed a penny to $1.79.

Next-day spot power prices were mixed. Intercontinental Exchange reported that Wednesday on-peak power at the ISO New England's Massachusetts Hub fell $1.49 to $26.51/MWh and gas at the New York ISO's Zone G delivery point (eastern New York) rose $1.46 to $33.75/MWh, yet on peak power at PJM West tumbled $11.26 to $40.57/MWh.

Major market hubs were mixed. Gas at the Chicago Citygate was quoted 4 cents higher at $2.74 and deliveries to El Paso Permian shed 2 cents to $2.50. Gas at the Henry Hub changed hands at $2.76, up 4 cents and parcels at the SoCal Citygate were unchanged at $2.84.