Natural gas for Wednesday delivery drifted lower in Tuesday’s trading as market points outside the volatile Northeast softened by about a penny or two.

The NGI National Spot Gas Average was down 2 cents at $1.64, and eastern points, on average, gained about a nickel. The weather outlooks (short- and long-term) remain moderate enough that at this late stage of the withdrawal season little impact is likely on what are seen as titanic storage gas levels entering the injection season. Futures managed to recover some of Monday’s setback. At the close April had risen 3.5 cents to $1.863 and May was up 3.3 cents to $1.937. May crude oil eased 7 cents to $41.45/bbl.

Next-day gas at major market hubs moved less than a penny as temperature forecasts continued to hover at higher than normal levels. Forecaster Wunderground.com predicted that Chicago’s toasty high Tuesday of 62 degrees would slide to 48 Wednesday and rise to 51 Thursday with a chance of snow. The normal high in Chicago in late March is 49. New York City was forecast to be way above normal. Tuesday’s high of 60 was expected to reach 69 Wednesday before slipping to 66 Thursday. The seasonal high in the Big Apple is 52.

Next-day gas at the Henry Hub shed a penny to $1.75, and deliveries to Northern Natural Ventura fell a penny as well to $1.81. Gas at Opal rose a penny to $1.61, and deliveries priced at the SoCal Border Avg. Average changed hands flat at $1.68.

Curiously, points in and around the upper Midwest enjoy a hefty premium to most all other market points. Gas on Alliance fell 4 cents but held a lofty $1.86, and gas at the Chicago Citygate was quoted at $1.88, down 4 cents. LDCs behind the Chicago Citygate were also quoted in the upper $1.80s, and gas on Consumers came in 4 cents higher at $1.89. Packages on Michigan Consolidated were unchanged at a stout $1.91.

An industry veteran said, “places like the upper Midwest all trade at a differential to one another so a maintenance issue or some other factor at one point can affect the entire regional pricing matrix.”

A Michigan marketer admitted that his firm had plenty of gas and were not buying, but he had heard of maintenance on nearby pipes.

Forecasters called for broadening cooler temperatures over key energy markets. WSI Corp. in its Tuesday morning report said, “The 11-15 day period forecast depicts the expansion of below-average cold over the eastern two-thirds of the nation, focused over the Midwest. Above- to much-above-average temperatures are likely over the West. [Tuesday’s] forecast is warmer or slower to bring the cold into the East, but is colder over the interior West and north-central U.S. CONUS GWHDDs are down 3.8 for days 11-14 and are forecast to be 74.1 for the period.

“Forecast confidence is a little better than average as medium-range models are in good agreement with the development of a highly amplified, -EPO [Eastern Pacific Oscillation] pattern that favors the expansion of late season cold. Despite the upward revision, the risk is to the colder side over the eastern two-thirds of the nation.”

Analysts see a tough grind lower ahead for the bears. “It appears that this market is now morphing into a consolidation phase with the official arrival of the shoulder period when non-weather related factors will be relied upon to force any significant price movement,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning report to clients. “With stocks at or near a record level with the huge surplus expected to expand appreciably again on Thursday, the two week short covering advance has been completed and we see some additional weakening going forward. But, with values at historically low levels, we will re-emphasize that the process of squeezing the final 30 cents out of a two-year $4.50 bear move will prove arduous and that selling should be selective.

“While price advances to our preferred sell zone above the $2 mark in May futures appear out of reach as far as this week is concerned, quantity type traders should maintain a core short holding in anticipation of fresh lows. As is the case in the petroleum, some production slippage is being seen in response to the dramatic plunge in rig counts. However, electric generation demand improvement off of coal to gas substitution continues to be a slow mover and has been unable to offer much price support.

“Although we still see strong possibility of fresh lows and a potential decline in May futures to as low as the $1.60 area, we feel that such a development will need to be seen by month’s end if it is to materialize. The primary argument for lower pricing continues to be a record level of storage that will likely be approaching 2.5 Tcf with Thursday’s release. But we are also forced to acknowledge that this supply side factor has been virtually discounted.”