Physical natural gas for Tuesday delivery took a look at a weak screen Monday and couldn't find any other redeeming market features. A few points followed by NGI made it into the plus column, but double-digit losses in the Northeast and Midwest overwhelmed somewhat steadier Rockies and California quotes.

The NGI National Spot Gas Average fell 10 cents to $1.77. Futures trading was following a similar playbook, with May falling 7.8 cents to $1.912 and June ceding 7.6 cents to $2.001. May crude oil continued on its upward trek, adding 64 cents to $40.36/bbl.

Spot natural gas futures are up 19% from the $1.611 low posted in early March, but spot crude oil has advanced 55% from the recent low print of $26.05 on Feb. 11.

In the Northeast, moderating temperatures resulted in declining next-day power prices, giving gas buyers little incentive to acquire incremental supplies for power generation. Intercontinental Exchange reported that on-peak power for Tuesday at the ISO New England's Massachusetts Hub fell $11.36 to $29.85/MWh.

Gas deliveries to the Algonquin Citygate declined $1.88 to average $2.29, and packages at Iroquois, Waddington retreated 22 cents to $2.02. Gas on Tennessee Zone 6 200 L tumbled $1.47 to $2.39.

Next-day gas in the Mid-Atlantic was mixed as a firm next-day power market held gas prices to small changes. Intercontinental Exchange reported that next-day on peak power at the PJM West terminal rose $1.16 to $35.72/MWh.

Parcels priced at Tetco M-3 Delivery rose 6 cents to $1.65, and gas headed for New York City on Transco Zone 6 shed 2 cents to $1.68.

Temperatures were forecast to hover around seasonal norms. predicted the high Monday in Boston of 58 degrees would ease to 56 Tuesday and slide to 50 on Wednesday, 4 degrees below normal. New York City's 60 high on Monday was anticipated to drop to 57 on Tuesday and continue to 56 on Wednesday, also 4 degrees below normal.

Monday afternoon there was no market impact from pipeline interruptions on both NGPL and ANR. According to industry consultant Genscape Inc., NGPL declared a force majeure on Sunday “that could reduce receipts on the M&M line in Oklahoma by 100 MMcf/d starting on Tuesday. The pipeline will not accept receipts in Zone 3 between compressor stations 156 and 158 until remediation work is completed, which NGPL expects before the end of April."

ANR also declared a force majeure that is expected to restrict flows through the west to east Michigan Leg South segment starting on Tuesday and lasting through April 20. ANR reported reductions of 535 MMcf/d, leaving 798 MMcf/d available from Tuesday through Friday, and a stout 831 MMcf/d cutback, leaving 502 MMcf/d from Saturday to April 20.

Quotes throughout the Midwest eased. Gas on Alliance traded 9 cents lower at $1.88, and deliveries to the Chicago Citygate slipped a dime to $1.90. Parcels on Consumers changed hands 9 cents lower at $1.95, and deliveries to Michigan Consolidated were seen 9 cents lower as well to $1.93.

Weather forecasters were calling for near-term moderation and less energy demand.

"The main story from the weekend is generally warmer changes this week and next, leading to a net loss of demand (opposite of prior weekend),” said Commodity Weather Group President Matt Rogers in a Monday morning report. Modeling Monday morning “is in fairly good agreement on warmer than normal temperatures for the Midwest and West Coast during the six-10 day period, with a slight warmer leaning for the East Coast, too.

"About 10 national heating degree days are expected to be lost in the forecast, and while we may have gained one to three cooling degree days (CDD) overall, the net impact of cooling demand is still fairly small this early in the game. The 11-15 day is starting to look somewhat more complex as some models try to return high pressure ridging toward the Gulf of Alaska.”

Although a moderating weather pattern may be in play in the short run, longer-term forecasts are more bullish. The probability of a transition from a Pacific El Nino to a La Nina event later this year, which many forecasters believe could pump up tropical storm activity in the Atlantic Basin, could also lead to a hotter-than-normal summer, according to MDA Weather Services (see Daily GPI, April 7).

The June-through-August period is expected to be 9.6% hotter than the 30-year norm, based on population-weighted CDDs, which would rank the summer as the fifth hottest since at least 1950, slightly hotter than the 10-year norm and only slightly hotter than last year, MDA said.

In the meantime, risk managers are biding their time.

"Natural gas will most likely be in a holding pattern until we get closer to the summer cooling season," said DEVO Capital President Mike DeVooght. "If we get warmer than normal temperatures early in the season, we could move back into the mid-$2 range. On a trading basis, we will continue to stand aside and await further developments."

Should the opportunity arise, however, DeVooght recommended physical market longs sell the April October strip at $2.70. The problem is the strip settled Friday at $2.191.