With arctic cold finally blanketing most of the Midwest and Northeast, the question now becomes whether this cold blast from Canada will be too little and too late to stem the fall of natural gas futures prices.

According to the futures screen on Tuesday, the answers are “yes” and “yes.” After coming out of the gates Tuesday morning and immediately recording the day’s high at $6.68, February natural gas futures spent the rest of the session treading lower. The prompt month hit a low of $6.08 just before expiring at $6.137, down 25.8 cents on the day.

In the most recent report of open interest by the Commodity Futures Trading Commission (CFTC), a whopping net short position of 54,882 contracts was reported as of Jan. 11 by non-commercial traders. This represents an increase of 7,249 contracts from the week before. Some say prices may have a ways to go. “I don’t expect the funds to start bailing out of their short positions until $7.25,” said a New York floor trader. He said there was minor technical resistance at $6.75 and major resistance at $7.20.

Despite the fact that weather forecasts are calling for the East-West to keep their cold-warm divide in coming days, Tuesday’s market action is a sign that the weather won’t produce enough of a drain on storage to drive prices to a higher level, said Tim Evans of IFR Energy Services. “Instead of the funds, it is the producers who are on the defensive,” he said. “While some of the temperatures posted in the Northeast have been impressive, it looks like the futures market has attracted more in the way of fresh selling than short covering in response.”

In its six-to-10-day forecast released Monday, the National Weather Service continues to call for colder than normal temperatures for the entire East, with warmer than normal readings still in the West.

Speaking before Tuesday’s market opened, Atmos Energy Marketing’s Bob Deman said, “The high crude oil price is supportive, but I think natural gas prices still will work lower. It’s getting to the point where there are less than 75 days left in the heating season and most users have more than that amount of withdrawal capacity,” he said.

Due to the warm beginning to winter and the record amount of natural gas in underground storage, many in the industry believe that winter-ending gas storage levels could be in the 1,250 to 1,350 Bcf range, with some estimates as high as 1,600 Bcf, according to the latest “Stat of the Week” released by Raymond James.

However, ever bullish analysts at Raymond James said they believe that winter-ending gas storage will be much lower than those lofty consensus expectations.

“We believe that the largest discrepancy between our and the consensus expectations stems from the weather-adjusted impact on demand,” the company said. “Specifically, we believe that the gas markets are now 2 Bcf/day tighter vs. last year on a weather-adjusted basis. When extrapolating this metric over the remainder of the heating season, (assuming normal temperatures) the math says that March 31st gas storage is likely to end closer to 1,000 Bcf.”

The analysts noted that while 1,000 Bcf in winter-ending storage does not suggest a near-term gas crisis, it would be a “big signal” that the gas market is tighter than the market currently believes. “Of course, that would be very bullish for U.S. natural gas prices and gas-driven energy stocks,” they added.

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