Gas for Tuesday physical delivery showed wide variations in price with eastern and western points showing gains, but locations in the country’s mid-section taking declines. Overall the market was 4 cents to $2.34, but double digit gains in New England and the East along with additions of a couple of pennies to Rockies and California points were able to offset declines of a dime or so in the Gulf.

Even though the hard-hitting weather patterns of winter are no longer in play, futures prices fell on expectations that more mild weather by the end of the month would hasten the end of the long-term storage deficit and accelerate the pace of upcoming injections. At the close May had dropped 9.8 cents to $2.536 and June was lower by 10.1 cents to $2.578. May crude oil added 64 cents to $56.38/bbl.

Next-day prices at Northeast points posted solid gains as pipeline maintenance and restrictions kicked in. Algonquin Gas Transmission (AGT) reported that it had “scheduled and sealed [all] nominations sourced from points west of its Southeast Compressor Station (Southeast) for delivery to points east of Southeast. No increases in nominations sourced from points west of Southeast for delivery to points east of Southeast, except for Primary Firm No-Notice nominations, will be accepted.”

According to Genscape AGT will also begin maintenance expected to result in sizeable capacity reductions. Genscape reported that flow through the Southeast Compressor Station will be reduced by 516 MMcf/d or 38% of its 3-day average volume. AGT full capacity is listed at 2.74 Bcf/d.

Higher next-day peak power prices also added to the incentive to make incremental gas purchases. Intercontinental Exchange reported that on-peak power for delivery Tuesday at the ISO New England’s Massachusetts Hub rose $7.52 to $35.52/MWh.

Next-day gas at the Algonquin Citygates shot higher by $1.46 to $3.28 and deliveries to Iroquois Waddington gained 31 cents to $2.85. Gas on Tennessee Zone 6 200 L added $1.21 to $2.99.

Gas bound for New York City on Transco Zone 6 rose 44 cents to $2.20 and deliveries on Tetco M-3 rose 9 cents to $1.62.

Weather patterns throughout the East were dominated by heavy rains and storminess rather than unusually cold temperatures. “Unsettled weather will move into the New York City area to start the new week following a warm weekend,” said AccuWeather meteorologist Krystina Pydynowski. “A slow morning commute with potential delays both on the ground and in the air can be expected Monday as the rain pours down, [and] The rain can pour down heavy enough to trigger flash flooding in low-lying and poor drainage areas.”

Gulf prices fell hard while more western points firmed. Gas for delivery Tuesday on ANR SE fell 10 cents to $2.46 and parcels on Tennessee 500 L changed hands 11 cents lower at $2.50. Gas at the Henry Hub came in at $2.54, down 10 cents and deliveries to Katy were quoted at $2.52, down 5 cents.

On CIG Mainline Tuesday deliveries added 7 cents to $2.25 and gas on El Paso Permian rose a penny to $2.31. On Northwest Pipeline WY gas was seen at $2.26, up 3 cents and deliveries on Transwestern San Juan rose 2 cents to $2.33.

Genscape reported a slight increase in Rockies demand for the day, to 1.32 Bcf/d from 1.31 Bcf/d.

Analysts see the day’s decline as part of a larger pattern of weekly fluctuations based on the uncertainties of gas storage going forward. “By our count, natural gas prices futures prices have volleyed between weekly gains and losses over the past nine weeks with a general downtrend during the period well apparent. Fundamentals aside, last week’s gain suggests this week’s softer start is right on schedule,” said Teri Viswanath, director of natural gas trading strategy at BNP Paribas in a Monday note to clients.

“Uncertainty on the pace of restocking appears to be largely responsible for the enduring weekly tug-of-war in prices, with general agreement that the industry should have no problem with building ample inventories in advance of next winter. Since the start of the month, daily storage injections have outpaced year-ago levels, with past two weeks reflecting an unmanageable 5.85 Bcf/d year-on-year surplus.  According to EIA’s latest official release, working gas in storage increased 63 Bcf for the week ending April 10 or a 41 Bcf increase from last year’s 22 Bcf build.”

Viswanath sees a similar stout build coming in this week’s report. “For the week ending April 17, the interstate pipeline data suggests that a similar surplus in the ledger remained, with a 85-87 Bcf build likely reported for this week’s EIA stock release.  For next week’s report, colder weather in the Midwest suggests much tighter balances with restocking more in line with the 77 Bcf reported last year. Thereafter, we expect another outsized build before weekly injections begin to lag behind last year.

“The fact remains that the industry simply cannot accommodate a new record build in inventories. Indeed, if the industry restocked at the same pace as last year, working gas in storage would rival the highest levels ever reported for each reservoir — a possibility that appears unlikely. In order to avoid such an outcome, we expect that the market will likely keep prices discounted for an extended period.”

Forecasters see a warming trend settling in by the end of the month. “[Monday’s] 11-15 day forecast is warmer than previous forecasts across the bulk of the nation, except the Northwest,” said WSI Corp. in its Monday morning report. “

Analysts suggest the fact that Thursday’s bearish Energy Information Administration storage report ultimately resulted in a 7-cent rally may be a sign of things to come. Mike DeVooght, president of DEVO Capital, a Colorado-based trading and risk management firm, in a weekly report to clients said, “Natural gas settled slightly higher across the board. Early in the week, we broke to new lows. But after the new lows failed to generate any sell interest, the gas market rebounded into positive territory. The weekly gas storage number came in higher than expected but failed to push the markets lower.

“The fact it did not go down on bearish news could be indicating that the market is ‘sold out.’ Rallying on bearish news is often a precursor to a short-covering rally. On a trade basis, we continue to stand aside for producers. End-users should be looking at forward purchases for the summer months.”