Natural gas for delivery Wednesday as well as futures contracts suffered double-digit drubbings in Tuesday's trading as longer-term weather forecasts once again turned more mild, and near-term temperature outlooks as well as a weak power market conspired to send next-day and next-month prices reeling.

A few points followed by NGI made it into positive territory by a penny or two, and a handful were unchanged, but the NGI National Spot Gas Average tumbled 31 cents to $3.38. Futures opened weak and continued to soften as the trading session wore on, and by the close, January had dropped 12.9 cents to $3.263 and February was off 13.4 cents to $3.297. January crude oil expired 11 cents higher than Monday at $52.23/bbl.

Overnight weather models once again turned milder. "The forecast undergoes a significant shift to the warmer direction with widespread much aboves now expected across much of the Midcontinent and South into the Mid-Atlantic," said MDA Weather Services in its Tuesday morning six- to 10-day outlook.

"The largest changes take place early in the period as models show good agreement with regard to the placement of an area of low pressure over the northern Plains that draws unseasonably warm air out ahead of it into the Midwest and South early and the East mid-period. In general, models are in good agreement with regard to the broad warmth across the eastern half, although the Euro is warmer than the GFS [Global Forecast System] across the northern tier."

That warm-up is likely to be good news for producers, who have seen recent cold impacting production. "Production curtails remain in Texas, Oklahoma, Permian New Mexico, San Juan and the Rockies," said industry consultant Genscape in a Tuesday morning report.

"Spring Rock Daily Pipe Production data indicates there is roughly 1.63 Bcf/d offline with the current cold. Estimated freeze-offs peaked Sunday near 1.9 Bcf/d, [and] total disruptions since Dec.7 sum up to about 9.5 Bcf. The largest daily impacts have been in Texas and the New Mexico Permian. But the largest cumulative impacts have been in Denver-Julesburg and Bakken, where volumes have shown daily disruptions since the 7th [of December]."

The warmer temperature outlook is likely to change the pace of storage. "This [weather] extension is upping the possibility of a couple of bearish EIA releases within the first half of next month," said Jim Ritterbusch of Ritterbusch and Associates in closing comments. "And, although Thursday's release is likely to push the long standing supply surplus against five-year averages down to around 100 Bcf in comparison with an overhang of more than 800 Bcf earlier this year, this development has been duly discounted.

"From a technical perspective, this market has now moved into oversold territory where we would strongly caution against any short positions. Support at our expected $3.25 area has held thus far, and the subsequent bounce off of this region attests to the fact that values are becoming overcooked on the down side," Ritterbusch said.

According to market technicians versed in Elliott Wave and retracement, prices are also falling into broad support zones. They see little to indicate the present downtrend in prices is likely to abate any time soon. "While natgas was able to drift higher Monday, the only hint of bottoming action comes from a slight momentum divergence," said Brian LaRose, a market technician with United ICAP, in closing comments Monday.

"That is it, not compelling enough for us to seriously entertain bottoming action. So unless the bulls can build on the divergence Tuesday, we are still looking at further downside this week. As a reminder, $3.307-3.250, $3.162-3.125 and $3.016 are our candidates for support."

In physical market activity, next-day temperature forecasts showed a rise in temperatures taking readings up to seasonal norms. Forecaster predicted that Tuesday's high of 35 in Boston would rise to 42 Wednesday and Thursday, 2 degrees above normal. New York City's 33 high Tuesday was anticipated to climb to 44 Wednesday before easing to 43 Thursday, also 2 degrees above normal.

Gas at the Algonquin Citygate plunged $2.49 to $7.60, and gas on Iroquois, Waddington shed $1.17 to $4.07. Deliveries to Tennessee Zone 6 200 L skidded $2.49 to $7.31.

Gas on Texas Eastern M-3, Delivery retreated 53 cents to $3.13, and gas bound for New York City on Transco Zone 6 dropped $1.78 to $3.94.

Forecast power loads declined and next-day peak prices fell hard. Intercontinental Exchange reported that on-peak power Wednesday at the ISO New England's Massachusetts Hub plunged $33.08 to $50.83/MWh, and deliveries to the PJM West terminal dropped $8.67 to $32.99/MWh.

Forecast power loads deteriorated. ISO New England predicted that Tuesday's peak load of 19,150 MW would slide to 18,350 MW Wednesday and 17,850 MW Thursday. PJM forecast a comparable decline. It said peak load Tuesday of 41,362 MW would fall to 39,517 MW Wednesday and 38,254 MW Thursday.

Double-digit declines ruled the day at major trading centers. Gas at the Chicago Citygate fell 20 cents to $3.34, and deliveries to the Henry Hub changed hands 16 cents lower at $3.36. Gas priced at the SoCal Citygate shed 29 cents to $3.55.