Pressured by forecasts for mild weather across much of the country, the natural gas futures market tumbled lower Monday as traders completely rescinded Friday’s gains.

With that the December contract notched its lowest close in nearly 11 months at $4.705, down 18.8 cents for the session and 23% below its $6.10 notched less than a month ago. At 73,012, estimated volume was on the light side, considering the size of the price retreat.

Though impressed by last Friday’s technical rally, traders agreed that revised forecasts for cooler weather were required in order for prices to continue higher this week. The market gapped higher at the opening bell with traders’ sights set on filling in the chart gap up to $5.04. However, the weather forecasts did not hold up their part of the bargain and the market was easily held in check by psychological resistance at the $5.00 mark. By 10:30 a.m. EST, prices were free-falling.

According to the latest six- to 10-day forecast released Monday by the National Weather Service, above-normal temperatures will linger across much of the eastern half of the nation. Average mercury readings are expected across the Central Plains and in parts of the Mid-Atlantic during the Nov. 9-13 time frame, the NWS reported. New England as well as much of the West will see below-normal temperatures — a possible rally cry for bulls looking for winter weather.

Also sending mixed signals were cash prices, which still lag considerably behind the futures market despite double digit advances Monday. At $4.12, NGI’s Henry Hub was up 13 cents for the session but still 60 cents below December futures.

But while the weather can change and the cash market could conceivably plow higher, market watchers hold out little hope that storage will be anything but a wet blanket for prices again this week. Early expectations are centered on a 28-52 Bcf build, which would easily trump the five-year average refill of 20 Bcf. And while a number of that magnitude could fall modestly short of last week’s 55 Bcf injection, it would contrast sharply with last year’s comparable report featuring a 27 Bcf withdrawal.

“Our 45 Bcf injection forecast would leave storage inventory levels at 3,166 Bcf, 21 Bcf higher than last year and 106 Bcf higher than the five year average,” wrote Lehman Brothers analyst Thomas Driscoll in a note to clients Monday. “Natural gas storage appears to be on track to end the refill season above 2002 levels.”

However, not all market-watchers are expecting another robust build. Citing heating degree data that suggest the weather for last week was cooler than the week prior (78 versus 58 heating degree days), Stephen Smith Energy Associates calls for a 28 Bcf refill to be announced Thursday. Last week, SSEA’s estimate of 54 Bcf narrowly missed the actual 55 Bcf refill reported by the EIA. “This error of 1 Bcf compares with a mean absolute error for 15 other published estimates for the same week (by investment firms, trading firms, consulting firms),” the group boasted in its Weekly Gas Outlook published Monday.

In daily technicals, Friday’s $4.64 low is the key for December support, with failure to hold there reestablishing the downtrend and suggesting a further test of the September-October sport lows at $4.39-40, offers Tim Evans of IFR Pegasus in New York.

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