As oil prices sunk below $50/bbl and stock markets took another nosedive, natural gas futures traders took a breather on Tuesday. With little change to the overall weather picture, the March Nymex gas futures contract closed a rather quiet session at $1.847/MMBtu, up 2.0 cents day/day. April climbed eight-tenths of a cent to $1.851.

U.S. spot gas prices also posted modest gains ahead of a blast of cold air expected to hit the country later this week. The NGI Spot Gas National Avg. picked up 3.0 cents to $1.695.

Tuesday’s tight, roughly 4-cent trading range for natural gas futures reflected the rather stable weather outlook for the Lower 48 for the next couple of weeks. The midday Global Forecast System (GFS) was less impressive with the coming cold shot late this week, but gained demand back next week beginning Tuesday through March 8, with a slightly stronger cool shot across the northern United States, according to NatGasWeather.

It was “essentially a little better GFS run in the latest midday data if the natural gas markets were looking for an excuse to gain a few cents back, although far from bullish,” the forecaster said. “There’s still potential for better pushes of subfreezing air into the northern United States around March 9-10, but far from convincing.”

Even with revisions to projected demand, the pattern is still cold enough late this week into the weekend as cold air is forecast to sweep across the Midwest and Northeast, according to NatGasWeather. Overnight lows ranging from below zero to the 20s were expected in key demand regions, with 20s and 30s into the South and Southeast, the firm said.

While Genscape Inc. analysts agreed that demand should see a boost with the coming cold snap, the uptick may be “somewhat moderated” by the accompaniment of heavy snow across the northern tier of states that can destroy some demand, along with the weekend effect. East region demand is expected to rise from Tuesday’s nominated 30.7 Bcf/d to a high of 38.9 Bcf/d by Friday, and then remain above 38 Bcf/d through the weekend, the firm said.

Bespoke Weather Services noted that despite some warmer changes in the forecast, prices held their own. “They did drop some overnight, but we have seen this pattern with a price low early in the morning and then a pop as we move into cash trading. This pattern of price movement could continue the rest of this week, as cash prices are expected to be firm relative to prompt month.”

Ultimately, however, with the pattern being so warm, risk is that prices gradually reach new lows over the next couple of weeks, according to Bespoke.

In terms of balance data, production was still roughly 4.3 Bcf off highs, while liquefied natural gas was only 0.2 Bcf lower compared to Monday, the firm said. Meanwhile, Tuesday marked options expiration, with the full March contract expiration on Wednesday. “This could cause some erratic moves in price, which is why we are neutral as far as our near-term sentiment,” Bespoke said.

Meanwhile, increasing concerns about the coronavirus continued to wreak havoc on oil futures and stock markets. Nymex West Texas Intermediate April futures settled Tuesday at $49.90/bbl, down $1.53 from Monday’s close and off $3.48 from last Friday. Brent April futures settled $1.35 lower day/day at $54.95, which is $3.55 lower than Friday’s close.

Warnings from the Centers for Disease Control and Prevention of a possible outbreak in the United States may have spooked investors, causing a turnaround in stocks that had opened the day higher. A Jefferies Equity Research team said it increasingly is finding it difficult to believe that U.S. cases are as low as reported. The team, led by Simon Powell, said given the flow of Chinese, Korean and Iranian nationals into North America, a large U.S. community-based outbreak is increasingly likely.

“If not managed correctly, this could significantly rattle markets,” the researchers said. While China has shut down the city of Wuhan in an effort to contain the Covid-19 outbreak, a similar course of action in the United States “wouldn’t work, and could cause panic on a scale that would spook markets.”

Also Tuesday, Bloomberg reported that a Chevron Corp. employee in London had flu-like symptoms but it had not yet been determined to be Covid-19. The U.S. major ordered some of its London-based traders and some employees to work from home.

Cash markets crept higher on Tuesday as cold air was expected to push “aggressively” across the Canadian border into the west-central United States mid-week, according to forecasts.

The weather system then was forecast to sweep across the Great Lakes, Ohio Valley and Northeast beginning Thursday for a surge in national demand. With the chilly air expected to linger through Sunday, the period could see national heating degree days “solidly above normal,” NatGasWeather said.

In the Rockies, CIG led the region’s gains as next-day gas jumped 6.0 cents to $1.645.

Panhandle Eastern in the Midcontinent climbed 8.0 cents to $1.620, while the Midwest’s Chicago Citygate picked up 4.5 cents to average $1.770.

Most markets across Texas notched single-digit increases, while Permian Basin pricing improved a bit more day/day. Waha jumped 16.0 cents to average 31.5 cents.

Increases were limited to less than a nickel across Louisiana and the Southeast, while most markets in Appalachia were up no more than a few pennies on the day. Transco-Leidy Line, however, slipped 3.5 cents to $1.555.

In the Northeast, Transco Zone 6 NY cash climbed 7.5 cents to $1.755 as production remains off a bit in the region. Genscape projects that Northeast production peaked in October, with a subsequent dip and plateau through 2022.

“According to these expectations, we should see Northeast production bounce back up near high 32/33 Bcf/d, whereas right now production is coming in the low 32 Bcf/d range,” Genscape natural gas analyst Nicole McMurrer said.

The outages in northeastern Pennsylvania are mainly concentrated along Stagecoach and Millennium pipelines, which indicate there could be some field maintenance occurring, according to Genscape. “It’s possible some of the outages are price related as this winter has been relatively mild, and prices have remained much lower than last winter,” McMurrer said.

Ohio production has dipped in a pattern that is “extremely similar” to what Genscape saw around the same time over the last two years, based at the facility level. “Unfortunately, in both of these scenarios (field and facility-level maintenance events), pipelines do not usually post any details describing what is actually occurring. We do believe there are some declines present, but we are expecting production to bounce back up,” McMurrer said.

The analyst noted that some of the increasing production in southwestern Pennsylvania looked to be related to rerouted gas from Ohio.