Physical natural gas prices bounded higher on Monday for Tuesday trading as temperature outlooks in major eastern and Midwest population centers either held seasonal norms, or in the near term were forecast to drop below normal by, in some instances, double-digits.

Double-, and in some cases, triple-digit gains at eastern points were more than able to counter declines in the Rockies and California. The NGI National Spot Gas Average gained a healthy 31 cents to $2.71. The Northeast rattled higher by about $2 on average.

Futures traders were not convinced and at the close, February was down 0.3 of a cent to $2.334 and March had fallen 1.3 cents to $2.350. February crude oil shed 28 cents to $36.76/bbl, apparently not impressed with the 276-point decline in the Dow Jones Industrial Average to 17,149.

New England prices led the eastern charge higher with multi-dollar gains and forecasts on Tuesday of sharply below normal temperatures. AccuWeather.com predicted Boston’s high of 27 degrees on Monday would fall to 24 Tuesday before rebounding to 40 on Wednesday. The seasonal high in Boston is 36. New York City’s Monday maximum of 31 was expected to hold Tuesday before rising to 40 on Wednesday, 2 degrees above normal.

Gas at the Algonquin Citygate rose $2.71 to $7.92, and deliveries to Iroquois, Waddington gained $1.25 to $4.07. Deliveries to Tenn Zone 6 200L added $2.82 to $7.94.

In the Midwest, temperatures Tuesday were seen at seasonal norms, but next-day gas was higher by about a dime. AccuWeather.com forecast Chicago’s high on Monday of 30 would reach 32 Tuesday and 37 on Wednesday, five degrees above normal.

Tuesday deliveries to the Chicago Citygate were quoted 3 cents higher at $2.48, and gas at the Henry Hub rose 8 cents to $2.39. In the West it was a different story, with Kern River shedding 2 cents to $2.47, and gas at the SoCal Citygates gained a penny to $2.73.

Next-day power prices were also supportive. Intercontinental Exchange reported that on peak power at the New York ISO’s Zone A delivery terminal rose $1.31 to $38.00/MWh, and power at the PJM West delivery point rose 36 cents to $43.06/MWh.

In what appears to be a reversal of recent trends, Portland, OR-based consultant Energy GPS noted that even though it is early in the 2016 water year, California snow-water equivalents are running at just below 40%, the seasonal average.

“The season is off to a great start all things considered,” Energy EPS said. “If the month of January gives us another set of storms, the water year will have a chance to reverse the recent trend of drought-like conditions as we head into the spring and summer season.”

Next-day gas at Malin fell 3 cents to $2.55, and gas at the PG&E Citygate rose a penny to $2.84.

Analysts see the market focused on power demand and to what extent it is likely to stick.

“The higher than expected withdrawal last week [58 Bcf] gets folks trying to figure out where that extra demand comes from,” said BTU Analytics Managing Director Tony Scott. “Is it power and is that demand going to be sustained and are folks going to try and run those [generation] units throughout the year?

“As you look at this next storage number, if it’s above expectations or at least in line with the increased holiday demand we saw last week, that is likely to give people some conviction that this power demand is going to stay in the market. We may also be seeing more demand response in places like Texas where there is not a lot of visibility, and I think that’s where you will see the volatility. It’s also the end of the year and pretty light trading as well.”

Scott said New York City finally was seeing a bit of cold weather, “but looking at the 10-day forecast it looks like it’s back in the 50-degree range by next Sunday. We are seeing about 3 Bcf/d higher power burn year-over-year, and that definitely helps to chew up some of that gas, but a warm winter is not going to help things for very long.”

Weather forecasters are calling for a near-term counter-intuitive expansion of cold weather along with reduced heating requirements.

Monday’s six-10 day period forecast “features the expansion of below-average cold,” WSI Corp. said Monday in its six- to 10-day outlook. “The forecast is warmer than Friday’s forecast across the southern and eastern U.S., [but] the northern Rockies and north-central U.S. are sharply colder.”

Continental U.S. natural gas-weighted heating degree days “are down 3.6 to 153.2 for the period. Forecast confidence is average…as models are in good agreement with the pattern change and influx of arctic air into the central and eastern U.S. However, there are typical technical and timing differences.

“The central U.S. has a small risk to the colder side during the front half of the period, while the cold risk shifts into the East by the end of the period.”

In RBN Energy’s “Top Ten RBN Energy Prognostications for 2016 — Year of the Monkey,” Rusty Braziel pointed to several natural gas-related issues. He said “Marcellus gas still a problem. Good grief! What a massive understatement for 2015. The average NGI Tennessee Zn 4 Marcellus natural gas price for December 2015 was 99 cents/MMBtu. That’s not the basis. That’s the price.

“There is a market share battle coming to Henry Hub natural gas. Sadly for gas producers, this one happened right on cue. Natural gas production in the Marcellus/Utica continued to grow, the volumes competed successfully with Southeast/Gulf volumes for market share (based on lower per-unit production cost and expanding takeaway pipeline capacity). Throw in El Nino and it was a recipe for gas-on-gas competition resulting in prices below $2.00/MMBtu in December.”

DEVO Capital President Mike DeVooght is currently standing aside the market for all types of accounts, trading, end user and producer. “We will continue to monitor the market for an opportunity to establish short hedges,” he said in a note to clients.

“Santa Claus left end-users a present under the tree..a textbook bottom pattern on the long-term monthly bar chartt,” said Tom Saal, vice president at Miami’s FC Stone Latin America LLC. In his work with Market Profile and other analytical tools, he said there also “is bullish divergence on the Slow Stochastics technical study. Rising interest rates should increase the forward curve.”