Physical natural gas for Wednesday delivery moved little in Tuesday’s trading as firm pricing in Texas as well as steady pricing at Midwest and Midcontinent points were able to offset a weak Northeast pricing regime.

TheNGI National Spot Gas Average was flat at $1.41 and the Northeast was down a few pennies. Futures trading was equally uninspired with the spot April contract held to a 7-cent range and at the close April had added 2.2 cents to $1.712 and May was higher by 1.4 cents to $1.803. April crude oil scored what looked like a meteoric rebound, but at the end of the day settled $1.40 lower at $36.50/bbl.

Analysts are closely following storage trends to ascertain whether diminished production might lead to an eventual rebalancing of the market. “Storage continues to trend close to being uncomfortably strong given the current weather forecast through early March (mild), which means there aren’t that many days left in the traditional winter heating season to get a surprise weather event,” said Breanne Dougherty, analyst with Societe Generale in a report.

“At the moment our outlook points to an end of March finish of just over ~2.4 Tcf. This stays under the historical max, but now just barely, and is significantly higher than we would like to see given an estimated 4.25 Tcf practical storage max.

“Storage will be our bellwether through 2016. While our trajectory through summer points to an end of October finish that will potentially set a new record, it is underpinned by a tightening of the ledger that we feel will be supportive of the market headed into winter 16/17.”

Could that tightening of the ledger already be in play? Industry consultant Genscape Energy reported a hefty 0.5 Bcf/d decrease from near-term peak levels. “Spring Rock’s estimate for Lower 48 dry gas production is down 0.35 Bcf/d day-over-day and is now 0.5 Bcf/d off the 14-day peak of 73.89 Bcf/d established Saturday. The largest declines are in the East, where volumes are more than 0.3 Bcf/d lower than yesterday and Saturday. Within the East, West Virginia declines are the largest at 0.1 Bcf/d. Southwest PA production is down 144 MMcf/d from Saturday with TCO and DTI each reporting about 50 MMcf/d of declines, and smaller declines showing on TETCO and TGP.

“Rockies volumes are also down 0.19 Bcf/d from Saturday with 0.21 Bcf/d lost from Green River overwhelming small increases west of the Divide. The New Mexico Permian is also showing 0.11 Bcf/d of declines versus Saturday.”

For the moment analysts aren’t buying the notion that production declines are the start of any rebalancing of the market and look for prices to continue trending lower.

“We are reluctant to read too much into the show of support that has developed thus far this week since we have not seen any significant shift in the fundamental inputs capable of sustaining much of a price advance,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients.

“Updates to the short-term temperature views that now stretch to about March 22 continue to favor much above normal temperature trends that still extend broadly across the eastern half of the U.S. This dramatic downsizing in HDDs will likely contribute to limited change in storage beyond this Thursday’s release. Although an expansion in the supply surplus against last year of as much as 125 Bcf has likely been baked in, we feel that an end of season supply as large as 2.5 Tcf is a possibility if temperatures prove warmer than currently expected within the six- to 14-day views.

“We had been anticipating a season-ending supply of around 2.3 Tcf earlier this year, and this incremental stock of 0.2 Tcf or some 9% would appear to associate with lower price levels. We see a down move to around $1.50 as achievable once the current oversold technical condition is resolved and the market is forced to refocus on a record supply that could eventually force storage overcrowding next fall unless the summer proves exceptionally hot.”

In physical market activity eastern points softened, but pricing at major market hubs rose. Temperatures in Boston and New York were forecast to be close to 30 degrees above normal. predicted the Tuesday high in New York City of 63 would jump to 73 Wednesday and hit 76 Thursday, 29 degrees above normal. Boston’s Tuesday high of 49 was seen rising to 70 by Wednesday before slipping back to 61 Thursday, 18 degrees above normal.

Gas at the Algonquin Citygate shed 38 cents to $1.12 and deliveries on Iroquois, Waddington fell 11 cents to $1.59. Gas on Tenn Zone 6 200L shed 30 cents to $1.23.

Gas bound for New York City on Transco Zone 6 fell 8 cents to $1.02 and parcels on Texas Eastern M-3, Delivery added a penny to 91 cents.

Gas at the Chicago Citygate rose 7 cents to $1.68 and deliveries to the Henry Hub added 3 cents to $1.55. Parcels delivered to El Paso Permian were seen a penny lower at $1.41 and gas at the PG&E Citygate changed hands 3 cents higher at $1.84.

Longer-duration overnight weather forecasts moderated somewhat in their pace of ongoing temperature moderation. WSI Corp. in its Tuesday morning report said, “[Tuesday’s] 11-15 day period forecast still depicts widespread above average temperatures, except for portions of the interior West. Today’s forecast is a bit warmer across the East but colder over the Rockies and central U.S. CONUS GWHDDs are down 2.5 and are now forecast to be 68.4 for the period. This is 30 HDDs below average. Forecast confidence is only average at the very best today. Medium-range models are in reasonably good agreement, with a pattern change and shift to cooler conditions.

“However, there is inherent uncertainty during period of change and spread within the models with how this transition unfolds that limit confidence levels. The forecast has risks in either direction, but the general risk and trend is to the cooler side over the central and eastern U.S. The risk is greatest over the north-central U.S.”