Pressured by the release of another in a string of bearish weather forecasts and in sympathy with losses seen in the nearby crude oil pit, natural gas futures plumbed new three-week lows Monday, as traders continued to liquidate longs acquired during the month of October. The December contract never recovered from its 7-cent gap-lower open and finished with a 19.2-cent loss at $2.733.

Traders agreed the sizeable drop in futures was spurred by a weather report released by Rockville, MD-based EarthSat. In the company’s six- to-15 day weather outlook released Monday, EarthSat called for “impressive warming” to take hold over much of the nation and southern Canada for at least the front half of the 6-10 day period. Some cooling is expected during the middle to the end of the period in the central to eastern thirds of the country. The forecast also called for “temperature anomalies” in the Midwest to range from 15-25 F above normal during this weekend and into early next week.

EarthSat said it does not see a cool push arriving until the middle of next week. “The current thinking is that at least below normal temperatures should arrive, while warmer weather weakens and is squeezed toward the East Coast,” EarthSat’s forecast predicted. “Seasonal to above normal temps are favored in the West.”

As for the 11-15 day period, EarthSat said its models show a cool to cold trend, mainly for the central to western thirds of the United States, while the East will remain generally seasonal to warm.

However, the weather forecast might not have been the only influencing event on the futures market this morning. One trader said the American Airlines Airbus crash Monday morning in Queens, NYC, could also be making its mark on the screen. The Dow Jones industrial average, Nasdaq composite index and Standard & Poor’s 500 index all experienced drops in early trading Monday, as investors grew wary of renewed terrorist attacks.

Jay Levine of Advest Inc. remains cautiously bearish despite the large drops already sustained Monday morning. “This market remains in a bear trend and aside from end-users who might want to look to minimize their risk with light long hedges, I would look to be a seller of this market rather than a buyer. We could see extensions down to the $2.25 area,” he said.

However, another broker believes this price valley might not be that deep. While admitting that the market is working off an overbought condition, Tom Saal of Pioneer Futures in Miami maintains that the market will quickly find itself in an oversold position. Because of this potential technical flip-flop, he implores his buyers to be ready in the $2.40-59 area.

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