Physical gas prices for Thursday delivery fell in Wednesday's trading as winter-weary traders and marketers filled out basketball brackets and welcomed the relative quiet of shoulder season trading. On balance, physical prices fell about a quarter Wednesday with Northeast quotes tugging the market lower and Marcellus points giving a push upward.

California prices were firm and eastern locations fell anywhere from a few pennies to a quarter or more. At the close of futures trading, April had risen 2.8 cents to $4.484 and May was higher by 3.4 cents to $4.458. April crude oil rose 67 cents to $100.37/bbl.

New England points proved to be the day's biggest losers as temperatures up and down the East Coast were expected to rise above seasonal norms. Forecaster predicted that Boston's high of 40 on Wednesday would reach 52 Thursday and 46 Friday, the seasonal norm. Philadelphia's Wednesday high of 44 was anticipated to reach 55 Thursday and hold for Friday, above the seasonal norm of 49. In Washington DC, the high for Wednesday of 42 was predicted to jump to 58 Thursday and 61 on Friday; the seasonal high is 57.

The National Weather Service serving Baltimore and Washington said high pressure centered over Quebec would "continue to ridge down the eastern Seaboard" on Wednesday, with a cold front entering the Great Lakes and Ohio Valley moving through the middle-Atlantic region overnight. "High pressure will build Thursday into Friday...before the next cold front moves through on Saturday. Canadian high pressure returns Sunday and Monday."

Gas for Thursday delivery at the Algonquin Citygates dropped $1.48 to $5.36, and deliveries to Iroquois Waddington slid 58 cents to $5.45. On Tennessee Zone 6 200 L, next day parcels were seen at $5.47, down $1.49.

Next-day prices in California were mixed to a few pennies higher, but traders saw no clear market trends. Power generation requirements were light, and the state's grid operator CAISO reported decreasing loads. Wednesday's peak load of 28,503 MW was forecast to drop to 28,343 MW Thursday.

"If someone needs to sell, the market comes off a little bit more than it should, and if someone needs to buy, it rises more than it should. There is light volume everywhere and the markets are noisier," said a San Diego-based gas and power buyer.

At Malin Thursday gas came in at $4.45, down 3 cents, and at the PG&E Citygates, next-day deliveries were off a penny to $4.89. At the SoCal Citygates, Thursday packages changed hands at $4.81, up 5 cents, and at the SoCal Border gas was seen 8 cents higher at $4.60. El Paso S Mainline gas for Thursday delivery added 7 cents to $4.68.

Marcellus points posted gains, but other eastern points slipped lower. Transco Leidy gained 32 cents to $2.88, and gas on Tennessee Zone 4 Marcellus added 51 cents to $2.86. Next-day gas on Dominion was quoted at $4.06, down 3 cents, and gas on Columbia TCO shed 3 cents as well to $4.43. Tetco M-3 Delivery parcels fell 14 cents to $4.34, and gas bound for New York City on Transco Zone 6 slid 32 cents to $4.45.

Although overnight weather forecasts turned slightly warmer, the risk appeared weighted to cooler temperatures down the road. In its Wednesday six- to-10-day outlook, WSI Corp. predicted below- to much below-normal temperatures east of a broad arc extending from Montana to South Texas. The forecast "has trended slightly warmer over the East" compared with Tuesday's outlook. "Confidence is considered near average standards as models show good large-scale agreement but uncertainty increases mid-period in association to the development and track of a low pressure system over the East.

"Temperatures could run colder than forecast over the East late in the period if a potential developing Nor'Easter low pressure system produces a significant snowpack over the East states and provides a scenario that favors strong traditional cooling later in the period."

Analysts Tuesday were a little perplexed to explain April's 8-cent slide. "The natural gas futures had one of those days when the prices went one direction and temperature outlook went another, an indication that there's some debate in the market whether Monday's gains were justified or whether the overall price level is warranted," said Tim Evans of Citi Futures Perspective.

"The bearish case comes down to an assessment that the market is top heavy with speculative long positions at a time of declining seasonal heating demand. The bullish case is that the market continues to become tighter on a seasonably adjusted basis, with a growing year-on-five-year average deficit that normally correlates with rising prices over the intermediate term."

Last year at this time, 74 Bcf was pulled from storage and the five-year average is for a 30 Bcf withdrawal. Evans expects Thursday's storage report to see a 63 Bcf pull, and by April 4, the year-on-five-year deficit will have mushroomed to 1,046 Bcf, with total storage at 776 Bcf, the lowest since 2003. "We continue to view this as sufficiently tight to push natural gas futures back up to the $5.00 mark or somewhat beyond that level, although we have to admit that the market has struggled over the past  month to translate colder than normal temperatures into higher prices."

Thursday's storage report will present its version of March Madness as inventories are expected to slip below 1 Tcf, the first time since 2003. Kyle Cooper of IAF Advisors in Houston forecasts a draw of 53 Bcf, and United ICAP is looking for a withdrawal of 57 Bcf. A Reuters poll of 21 traders and analysts revealed an average 59 Bcf with a range of 42 Bcf to 70 Bcf.