Physical natural gas for Wednesday delivery moved within a few pennies of unchanged at most market points on Tuesday, although some locations in the East made an attempt to climb out of the sub-dollar doldrums.

The NGI National Spot Gas Average rose 5 cents to $2.48 and futures were able to put together a modest rally at the end of the session. At the close, November had risen 4.1 cents to $2.964 and December was up 1.3 cents to $3.183. November crude oil slipped 12 cents to $48.69/bbl.

In the East, market points found themselves with forecasts calling for both below normal and above normal temperatures. Forecaster said Boston's Tuesday high of 62 degrees should ease to 61 Wednesday before reaching 70 on Thursday, 4 degrees above normal. Buffalo, NY, was expected to see its Tuesday high of 75 slide to 74 Wednesday before climbing back to 77 Thursday, a stout 13 degrees above normal.

Gas at the Algonquin Citygate rose 20 cents to $1.90, and deliveries to Iroquois, Waddington added a robust 54 cents to $2.28. Gas on Tenn Zone 6 200L rose 21 cents to $1.83.

Marcellus points gained ground but found it difficult to make it past $1. Gas on Dominion South rose 12 cents to 90 cents, and deliveries to Tennessee Zn 4 Marcellus gained 11 cents to 89 cents. Gas on Transco-Leidy Line changed hands at 89 cents, up 12 cents.

Other market points languished around unchanged. Gas at the Chicago Citygate gained 3 cents to $2.75, and deliveries to the Henry Hub were quoted 2 cents higher at $2.83. Packages on Panhandle Eastern were flat at $2.61, and Kern Receipt shed a penny to $2.58. Gas at the PG&E Citygate also fell a penny to $3.26.

"It kind of surprises me that the Marcellus is under $1," said Steve Blair, vice president at Rafferty Technical Research in New York. "I think that a lot of people are thinking that the glut of gas has gotten slowly chipped away over the last month or so. Most of the natural gas community before the injection season started thought we would have well in excess of 4 Tcf at the end of October. We'd have to have some pretty big injections over the next few weeks to get there."

So what could happen if storage reaches or exceeds that critical 4 Tcf mark? For one, prices could be in store for significant downside pressure, especially if 4 Tcf is reached at a time when temperatures are expected to remain mild, limiting heating degree days (see related story).

"I think you've got some pretty good resistance on the way down," said Zane Curry, director of markets and research at Mobius Risk Group.

Curry said the market could see some consolidation around $2.78 and then again in the $2.60 area. "The real fundamental threshold would be around the $2.50 mark, which is a pretty key coal-to-gas threshold." How low prices could fall is dependent on when and if storage reaches 4 Tcf. "The earlier it occurs, the earlier that concerns arriving will lead to a lower price."

For the moment, $2.50 is not on traders' radar, and many see a rangebound market. "Although this market was able to sustain a late-session rebound, the early price decline below the $2.88 mark pushed us back into a neutral camp as it appears that some choppy/wide swinging price action will lie ahead in possibly leaving values unchanged from current levels a couple of weeks down the road," said Jim Ritterbusch of Ritterbusch and Associates in closing comments Tuesday to clients.

"The market is receiving little assistance from the weather factor at the present time as weekend updates to the one- to two-week temperature views are advising mild patterns that will be downsizing both heating and cooling demand into the third week of this month. And while a need to inject storm premium is often price-supportive at this time of the year, Atlantic activity has been relatively subdued this year.

"While hurricane Matthew will be receiving much media attention during the next few days, it doesn't currently look like a threat to the GOM production alleys. As a result, we look for this market to likely stay confined to today's highs and lows for a couple of sessions until the weekly EIA storage report offers additional guidance."

Weather forecasters are calling for a warmer Midcontinent in the 11- to 15-day period. "The models have continued to shift the track of major hurricane Matthew closer to the East Coast late this week and into the weekend, with concerns for the Florida coast up through the Southeast and with some impacts in the Mid-Atlantic and Northeast potentially, too, depending on how quickly it curves back to sea," said Commodity Weather Group in its Tuesday morning report.

"Cooling behind the storm still runs the risk of being a bit stronger in the Midwest and East especially as shown especially on the American and Canadian modeling, but then we still see the setup for a bigger warmer pattern getting going for the 11-15 day range."

In its 2 p.m. EDT report, the National Hurricane Center (NHC) said Hurricane Matthew was 65 miles east-southeast of Guantanamo, Cuba and was heading north at 10 mph. Maximum sustained winds were 145 mph, and NHC was projecting Matthew to follow a path across the Bahamas and up the eastern coast of Florida, Georgia and South Carolina.