Physical natural gas prices responded to what might be considered a tectonic shift in the weather outlook going forward and nearly all points followed by NGI posted healthy gains.

Forecasts of pervasive trends of warmer than normal temperatures were replaced by model runs showing declining temperatures through the week. The NGI National Spot Gas Average jumped 11 cents to $2.42 and the East saw quotes on average vault about a quarter.

Futures posted a mixed close. The expiring October contract fell 0.1 cent to $2.563 and November managed a gain of 3.9 cents to $2.670. Deferred contracts gained as well. November crude oil retreated $1.27 to $44.43/bbl. The Dow Jones Industrial Average fell 313 points to 16,002.

Weather models turned abruptly cooler over the weekend. MDA Weather Services in its Monday morning six- to 10-day outlook said, “The forecast trends considerably cooler versus expectations from Friday as ridging further strengthens over the northeast Pacific and into Alaska. While that large-scale feature could further cool this period, like shown in the American model, the remnants of what is currently a tropical depression in the western Atlantic will also lead to cooler temperatures with steady rains along the East Coast at the onset.

“Temperatures moderate in the East thereafter with more seasonal-like readings returning at mid-period. Similar levels of variability are seen in the Midwest as well, while the West is warm.”

MDA said risks to the forecast including the American model may bring more widespread below-normal temperatures into the Midwest and South, and coastal New England could be slightly warmer based on model guidance.

The shift in the forecast hasn’t changed at least one trader’s perspective. “Overall, we remain bullish in the natural gas market, and for now continue to hold one long contract,” said Harrison, NY-based Bespoke Weather Services. “We may add a second contract on price weakness through the day should guidance remain bullish, and we feel a test of $2.80 may be possible by the end of the week.”

Mike DeVooght, president of DEVO Capital Management, in a weekend note to clients said he is not recommending any positions for trading accounts, producers or end users. “We continue to believe there is a good chance of a short-covering rally as we get into the heat season and continue to monitor the market for signs that we should enter into a long position. But we are not there yet.”

The physical market responded sharply to the changing weather outlook not only as temperature forecasts started working lower, but as next-day peak power also rose in key markets. Forecaster Wunderground.com predicted Monday’s high of 75 in Boston would reach 78 Tuesday before sliding to 56 by Friday. The normal high in Boston in late September is 68. Chicago’s high of Monday at 79 was expected to drop to 67 Tuesday and by Friday was seen at 59.

Eastern points jumped the most. Gas at the Algonquin Citygates gained a stout 41 cents to $2.07, and gas at Iroquois Waddington added 73 cents to $2.91. Gas on Tennessee Zone 6 200 L rose 31 cents to $1.96.

In the Mid-Atlantic, gas on its way to Tetco M-3 Delivery was seen up 18 cents to $1.30 and gas bound for New York City rose 53 cents to $2.06.

Major market hubs also surged higher. Gas at the Henry Hub gained 9 cents to $2.63 and packages at the Chicago Citygate were 7 cents higher at $2.66. Parcels at the PG&E Citygate rose 8 cents to $3.13 and gas on El Paso Permian came in 6 cents higher at $2.53.

In Bid Week trading gas at the Henry Hub was reported with a basis of $-0.0075 to flat and gas at the Chicago Citygate changed hands at 12 cents over. At the Algonquin Citygate October basis was quoted at +85 cents to $1.05.

Power prices and power loads were forecast higher Tuesday. Intercontinental Exchange reported that Tuesday on-peak power at the ISO New England’s Massachusetts Hub rose $5.47 to $33.15/MWh, and next-day power at the PJM West Hub rose $2.21 to $36.77/MWh.

ISO New England forecast peak power at the Massachusetts Hub would rise from Monday’s 16,576 MW to 17,450 MW Tuesday before easing to 16,400 MW Wednesday. At the PJM Interconnect, Monday peak power of 36,791 MW was expected to make it to 39,198 MW Tuesday before dropping to 36,706 MW Wednesday.