Coming out of the gates in the opposite direction from the previous Monday’s 88.2-cent increase, March natural gas futures began this week exploring lower, reaching a $7.910 low before closing at $7.995 Monday, down 61.8 cents from Friday’s close.

While the weather forecasters continue to call for below normal temperatures across the country in the near-term, futures, coming off a mild January with near record natural gas storage volumes, continue to display weakness.

“The outlook for colder temperatures is unanimous among forecasters,” said Ed Kennedy of Commercial Brokerage Corp. in Miami. “It is going to be below normal likely through Feb. 20, but there is plenty of gas in storage to handle the colder temperatures. That is why we put the gas in the ground.”

Kennedy added that the industry also has to remember that the market is currently trading March futures, not February cash. “March is the beginning of a shoulder period,” the broker noted. “We shouldn’t be following the cash market, which will remain firm. This is a cash market phenomenon, not necessarily participated in by the futures. That is the key.”

Despite the down day, Kennedy said support is likely just around the corner. “We will probably test that $7.75 low from the February contract next and I think it will probably hold. The last time we were down at $7.75, the end-users came in hell-bent for election and started taking protection. I fully expect to see them back again when we get down there.”

He added that the March contract still seems to be stuck within a range for the near-term. “On the upside, I see resistance at $8.50 to $8.70,” he said. “We’re not going anywhere.” Looking at the longer-term, Kennedy said the weather pattern for the second half of February holds the key. “That will decide if we have any more downside.”

Natural gas traders are ignoring the bullish tremors in the petroleum sector and concentrating on weather fundamentals. The National Weather Service (NWS) forecasts that important energy markets in the Mid-Atlantic and industrialized Midwest will enjoy below normal accumulations of heating degree days (HDD). For the week ending Feb. 11, the NWS forecasts that New York, New Jersey and Pennsylvania will receive 236 HDD, or 20 fewer than normal. The states of Ohio, Indiana, Michigan, Illinois, and Wisconsin are expected to be slightly cooler with just 272 HDD, or seven fewer than normal.

The Midwest may have to wait until the weekend or longer for some bone-chilling cold, but Alaskans already are experiencing new record lows. “In contrast to the mild weather that has been so prevalent across Chicago and the Midwest for the last six weeks, cold weather — even by Alaska standards — has been gripping our northernmost state,” said Tom Skilling, a meteorologist with WGNTV.com. He noted that an all-time record low of -56 degrees was set on Feb. 3 at Point Lay on the western Arctic coast of Alaska, while nearby Barrow’s low of -55 degrees (also on Friday) came within one degree of that location’s lowest reading ever, set back in 1924.

Looking at the NWS outlooks, colder than normal conditions look to be dominant following this week. Looking at Feb. 12-16, the NWS said the entire East and south central portions of the U.S are likely to experience below normal temperatures, while most of the West and north central states are expected to exhibit near-normal temperatures. For Feb. 14-20, the entire country is expected to experience below normal temperatures with the exception of the Southeast, which is expected to have near-normal temps.

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