Physical natural gas for Tuesday delivery crept lower in Monday's trading as strength in the East, Rockies and California could not offset broader weakness in Texas, Gulf Coast, Midcontinent and Midwest markets.

The NGI National Spot Gas Average eased 2 cents to $1.80, but futures prices relaxed even more. At the close, June had fallen 6.7 cents to $2.029 and July had also given up 6.7 cents to $2.177. June crude oil added $1.51 to $47.72/bbl.

Sharp blasts of cooler temperatures and resulting higher demand were enough to keep gas buyers on their toes in the East. Industry consultant Genscape Energy said, "In New England, the CDDs have been low enough to resume heating demand, which lifted regional demand to 2.77 Bcf/d [Monday]."

Gas on Texas Eastern M-3, Delivery added 8 cents to $1.56, and gas headed for New York City on Transco Zone 6 added 13 cents to $1.61.

Several points posted new 30-day high prices. Gas on Dominion South added a nickel to $1.49, and that was also enough to put it 5 cents over its 30-day high. Deliveries to Tennessee Zn 4 Marcellus gained 8 cents to $1.43, and that was 2 cents above its 30-day maximum.

Deliveries to Transco-Leidy Line changed hands 4 cents higher at $1.47, and that also put it 4 cents above its 30-day high. Gas on Texas Eastern M2 30 Receipt came in 7 cents higher at $1.48 and was 6 cents higher than its 30-day peak.

Gas buyers Monday were dealing with the aftermath of a frosty weekend. "Brisk, unseasonably cold conditions and even interior snow are closing out the weekend in the northeastern United States," said meteorologist Kristina Pydynowski.

Going forward, temperatures in the East will continue below normal. predicted the Monday high in Philadelphia of 65 degrees would drop to 61 Tuesday before climbing back to 67 Wednesday. The normal high in Philadelphia is 74. Buffalo, NY's Monday high of 57 was seen inching up to 58 Tuesday and adding another degree Wednesday. The seasonal high in Buffalo is 67.

The week's heating load is expected to increase in major markets. The National Weather Service said for the week ending May 21 New England should see 63 heating degree days (HDD), or five more than the norm. The Mid-Atlantic was expected to see 67 HDD, or 23 more than its seasonal norm, and the greater Midwest from Ohio to Wisconsin was anticipated to see 64 HDD, or 15 more than its norm.

Cooler temperatures and greater heating load notwithstanding, natural gas demand overall was expected to ease for the week. Soft near-term demand is likely to put pressure on spot prices. Genscape in a Monday morning report said, "Demand will remain weak on a national basis this week as Lower 48 population-weighted temperatures run well below seasonal norms through Friday. Genscape's meteorologic team's forecast expects Lower 48 cooling degree days (CDD) will average -34.1 today versus the normal of +10.4. CDDs remain in negative territory in the forecast until Saturday.

"However, the forecast calls for modest warming, which will push demand lower on a daily basis to a low of 1.59 Bcf/d by Saturday. Appalachia, Midwest and Southeast-Mid-Atlantic demand are also forecast to drop daily to Saturday lows of 5.09 Bcf/d, 6.6 Bcf/d, and 11.1 Bcf/d, respectively.

"Out west, where temperatures are running close to seasonal norms, demand is projected to hold flat through the week."

Futures traders were not impressed with the day's activity as prices gravitated toward the psychologically prominent $2 mark. "I think we've still got some room to the upside, but I don't know the way this market has reacted," a New York floor trader said. He noted that the June contract has been down more than 12 cents in the last two sessions.

"I don't think $2 is all that important, although you may get some initial support there. It's not anything we haven't been through before. It's well traveled territory and we've seen these ups and downs, but it was a good upward move to $2.17 and now it's giving it all back."

Seasonal parameters are suggesting lower pricing. Analysis shows that the seasonal window for a decline in natural gas prices is here. "For the years 1990 through 2014, the average seasonal decline in spot natgas has been a 34% loss is spot contract value from a 14 May peak to a 17 August low," said Walter Zimmermann, vice president at United ICAP.

"So the bear case for natgas is the case for a spring to summer seasonal decline. The big question is whether there are still too many shorts on board to allow for such a decline," he said in a weekly report to clients.

Tom Saal, vice president at FCStone Latin America LLC in Miami, in his work with Market Profile is looking for the market to test last week's value area at $2.172 to $2.118 and "maybe" test $1.926 to $1.878.