Physical natural gas values for Wednesday delivery advanced in Tuesday’s trading as gains in the Rocky Mountains, California and the Northeast were able to counter weaker pricing in the Midwest and Midcontinent.

The NGI National Spot Gas Average rose 4 cents to $1.68, and most points gained a nickel to a dime. April futures expired on a firm note, and with the May contract knocking on the door of $2, traders may be able to enjoy the fruits of $2 natural gas soon, a price not seen in nearly seven weeks. At the close, April had risen 5.5 cents to $1.903 and May was higher by 4.5 cents to $1.981. May crude oil fell $1.11 to $38.28/bbl.

“May could open tomorrow above $2 and settle up there, and it could be a whole new ball game,” said a New York floor trader. “The good news is that the natural [gas] maintained a positive note throughout the day as crude oil was down over $1, 2 cents on the heating oil and a penny and a half on the RBOB. Natural gas didn’t follow the other markets lower, which is a good sign.”

In spite of the day’s advance, analysts see short-term price risk.

“Market net short positioning has been falling over the last few weeks, reaching its smallest since August 2015 in week ended 21 March,” said Breanne Dougherty, an analyst with Societe Generale in New York in a report.

“This aligns with the price strengthening trend observed over that time period (rising 30 cents between 3 March and 17 March). The market removed some support [Wednesday], settling down nearly 7 cents on the day; but [Thursday’s] slightly bullish storage report seemingly stopped that downward trend headed into a long weekend.

“The 15-day weather outlook is a bit more supportive than what the market has been used to this winter, but the demand impact is limited. It is important to remember that, as March transitions into April, below-normal temperature expectations have much less of an impact. We expect the market will start the injection season very near the record set in 2012 (2.5 Tcf).

“Harnessing in the injection pace in April through June will be critical in order to establish confidence in a manageable trajectory and reduce the risk of storage containment pressure emerging by the end of October. This is why we see price risk weighted to the downside in the weeks ahead. Storage working capacity is basically unchanged from last year, estimated at 4.25 Tcf.”

Dougherty sees a May physical Henry Hub price of $2.20 and June at $2.35.

Forecasters see a slight near-term cooling trend, with some risks in either direction. WSI Corp. in its Tuesday morning six- to 10-day outlook said, “[Tuesday’s] six-10 day period forecast calls for anomalous cold over the upper Midwest, Great Lakes and into the Northeast. Above to much above average warmth is expected across the West, Plains and portions of the southern U.S.

“Today’s forecast has swung back a bit in a colder direction. CONUS GWHDDs are up 2.7 to 70.9 for the period. Forecast confidence is near average today based on reasonably good large-scale model agreement. However, there is localized uncertainty along a meandering arctic cold front across the northern Plains, Midwest and Northeast as there may be a sharp contrast in air masses.

“There are risks in either direction. The upper Midwest, Great Lakes and Northeast have a slight risk to the colder side given the proximity to the polar vortex. The interior West, central and southern U.S. could run a touch warmer during the front half of the period.”

Analysts following fundamental parameters don’t see much in the way of either reduced production or further increases in demand from coal-to-gas switching. “This market is still consolidating at around the middle of last week’s trading range, but we still see breakout of recent parameters to the down side given the market’s ongoing challenge of advancing in the face of a near-record supply level,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients.

“Although the EIA is likely to report a couple of storage draws this week and next, the total decline will likely fall short of 20-25 Bcf and wouldn’t be far removed from usual seasonal tendencies. As a result, supply will remain at a near-record level and not far below the 2.5 Tcf area. With the weather factor diminishing in importance and with the huge supply fully discounted, market focus is shifting to production and electric generation demand.

“Although output is seeing some ongoing slippage as some pass through from the plunge in rig counts is slowly developing, shifts have thus far been unable to force production below year ago levels. More output decline will be required if any balance between supply and off take is to be seen anytime soon. Meanwhile, electric generation demand is showing difficulty in advancing to above year ago levels despite price induced coal to gas displacement. It appears that the bulk of this substitution has already been seen and that additional demand electric generation gains off of this factor could prove arduous.”

It was a mixed bag in physical market trading. Next-day prices firmed but with little help from power prices or near-term temperature outlooks. AccuWeather.com forecast that New York City’s Tuesday high of 53 degrees would rise to 55 Wednesday and reach 66 by Thursday. The normal high in New York this time of year is 55. Chicago’s Tuesday high of 55 was seen reaching 61 Wednesday and holding 60 on Thursday. The seasonal high in the Windy City is 53.

Gas at the Algonquin Citygate added 20 cents to $1.76, and deliveries to Iroquois, Waddington rose 9 cents to $1.96. Gas on Tenn Zone 6 200L eased 6 cents to $1.94.

Parcels on Alliance were seen flat at $1.77, and Chicago Citygate gas came in at $1.83, up 2 cents. Gas on Consumers changed hands 2 cents higher at $1.81, and deliveries to Michigan Consolidated added 2 cents to $1.82.

Market hubs were solid. The Henry Hub was quoted at $1.77, up 4 cents, and gas on El Paso Permian rose 3 cents to $1.59. Gas at the PG&E Citygate gained a penny to $1.90.