March natural gas futures on Tuesday punched below the old low for the move of $4.280 as the National Weather Service (NWS) said it expects the United States to experience above-normal temperatures during the second half of February. The prompt-month contract ended up closing at $4.203, down 24.9 cents from Friday’s finish.

Just after 10 a.m. EST March futures put in a new low of $4.191, erasing the old $4.280 low set on Feb. 2. In addition to friendly weather news, natural gas bears also had the support of crude futures weakness. March crude on Tuesday dropped $2.58 to close at $34.93/bbl.

Natural gas traders and analysts said the bears appear to be still firmly in control of the market and that a break below $4 is not out of the question.

“There are some large bears in this market,” said Ed Kennedy, a broker with Hencorp Becstone Futures LC in Miami. “The National Weather Service is calling for above-normal temperatures for the second half of February, but all of the independent forecasters are saying just the opposite. It appears people are listening to the National Weather Service right now. Weather is king at this time of year. If the second half of February is above normal, then we are certainly going to see more market weakness.”

Kennedy said he did not expect any large breaks to the downside at this point, but that the market might elect to drift lower. “Some support will likely be offered at $4.050 with psychological support coming in at the $4 mark,” he said. “I think we could see gas with a three in front of the price, but it won’t stay under $4 for long. You’ve got people who are going to come in and buy this thing to lock in their prices for storage gas. That said, there is no question that the path of least resistance at this point is down.”

In its six- to 10-day forecast covering Feb. 23-27 NWS calls for vast and relatively heavily populated sections of the county to experience above-normal temperatures. Nearly all of the East and most of the southern and central portions of the United States are expected to have above-normal temperatures. California, western Nevada, northern Wyoming, Idaho, Montana, Washington and Oregon are expected to experience below-normal conditions for the period.

Analysts don’t see that boding well for natural gas bulls. “Natural gas prices are now in a seasonal and cyclical limbo,” said Peter Beutel of Cameron Hanover. Recognizing that there is still some winter left, Beutel says bulls will have to concede the fact that “the heart of winter (which ends with January) is behind us and any cold weather in front of us is going to be less dramatic than the weather behind us. It will be increasingly difficult for temperatures to extend all the way to Southern California or Florida or Texas. We will certainly get cold readings in the Upper Midwest and in the Northeast, but they are unlikely to be as severe or as long-lasting.”

Should natural gas prices ever rally, bears are ready to pounce. “Sell March natural gas at $5.00 — stop $5.40,” said Phil Flynn of Alaron.

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