Continued concerns over the coronavirus outbreak and its potential impact on demand had natural gas futures trading sharply lower early Monday, even as forecasts trended colder over the weekend. The April Nymex contract was down 7.8 cents to $1.791/MMBtu at around 8:30 a.m. ET.

Two opposing forces are pressuring prices as markets face significant headwinds from the virus, according to analysts at EBW Analytics Group.

“The battle between bulls expecting a steep decline in production of associated gas and bears fearing a recession and contraction in demand most likely is not over -- and natural gas could still recover some or all of its losses before today’s close,” the EBW analysts said.

But the demand impacts from efforts to contain the spread of the coronavirus could be considerable.

“School closings alone, however (colleges, universities and local schools in New York City, Los Angeles, Ohio and Illinois) are sufficient to wipe out a significant slice of demand for gas,” according to EBW. “Industrial demand in the U.S. is also likely to take a hit,” and the risk of a curtailment in Lower 48 liquefied natural gas (LNG) exports “is growing every day” as the global economy grows weaker.

“Price volatility is likely to remain high, with a growing downside price risk and less potential upside than seemed possible just a few days ago.”

Genscape Inc. estimated a 1 Bcf/d day/day drop in feed gas deliveries to U.S. LNG terminals for Monday, with volumes totaling 7.29 Bcf/d.

The firm alerted clients Sunday that its proprietary monitors “detected significant disruptions to operations at Sabine Pass. The cause of the disruption is not immediately known but contributes to a run of highly volatile LNG numbers of late: in the past 30 days, LNG feed gas volumes have ranged from as low as 6.8 Bcf/d to as high as 8.8 Bcf/d.”

As for the weather outlook, Bespoke Weather Services said it has added close to 10 gas-weighted degree days to its forecast for the next two weeks since Friday.

“This should prevent this month from ranking in the top five in terms of March historical warmth,” Bespoke said. “At this time, we feel like this is just another brief period of cold or variability, as we would still lean on the warm side into early April, but confidence is lower in this idea, as transitional seasons are often more difficult to predict based on traditional signals.

“Of course, this is also a time where weather becomes much less important to the natural gas picture.”

April crude oil futures were down $2.57 to $29.16/bbl at around 8:30 a.m. ET, while April RBOB gasoline was off about 21.4 cents to 68.6 cents/gal.