While a number of market experts say the current downtrend in natural gas futures might be almost exhausted, the March contract on Monday picked up where it left off last week, heading lower. The natural gas prompt month extended its decline streak to six consecutive regular sessions on Monday, finishing 7.3 cents lower at $7.243.

Despite putting in a high of $7.470 during the session, the focus of traders was more on the new low that was reached. March natural gas hit a low of $7.160, which is the lowest that a prompt month has ventured since $7.140 was reached on July 25, 2005.

March crude oil also continued lower Monday, reaching a low of $60.85/bbl before settling at $61.24, down 60 cents from Friday despite continued geopolitical fears.

While the bears’ reign over energy markets might be coming to an end, the recent cold and snow storms in the East failed to cause traders to so much as blink. IFR Energy Services analyst Tim Evans said the timing of the cold could explain the lack of follow-through support in the markets.

“After the downtrend of the past two weeks, the petroleum markets and natural gas are all oversold, and flagging downward momentum suggests that a turn higher may be in the offing,” said Evans. “However, the energy markets continue to struggle to execute an upward correction and this adds the growing realization that these are no longer bull markets. The weather outlook remains a potential fundamental support for these markets, but it has been so well advertised and has failed to boost prices to such an extent as to suggest that it is still too little winter, too late in the season to matter.

“There’s not that much downward momentum left, but the market keeps struggling to hold a floor,” he added. “The cold temperature forecast remains, but it won’t matter until the price says it matters.” As a result, Evans said he is 50% short March natural gas from $8.140, with a $7.640 buy stop to reverse to 50% long instead. He added that a sell stop at $7.240 would limit his initial risk on the trade.

Weather bears can take heart that the weekend cold and storms that pummeled key eastern energy markets won’t be around long. “Southwesterly winds will send milder air back into the Middle Atlantic and Northeastern states at midweek, and afternoon temperatures should climb into the 40s and 50s Wednesday and Thursday,” forecaster AccuWeather.com said. The mild air is expected to melt recent snowfall, but colder air is forecast to return by the weekend.

The high in New York City Monday was expected to be 30 degrees, but Tuesday, Wednesday and Thursday were expected to see highs of 37, 49 and 54 respectively, AccuWeather.com said.

Market technicians see a key test upcoming if natural gas futures are to stem the tide of selling. Walter Zimmerman of United Energy studies market “waves” and contends that the patterns within waves can be used to forecast market direction. “The case for (market) bottoming action hinges on a five-wave decline from the $15.780 high where the $9.820 peak (March futures, Feb. 1) was the start of the final fifth wave decline. Our analysis of this decline from the $9.820 high suggests that key support is the $7.080 to $7.075 area,” he said. He added that if the $7.075 area fails to hold, then much lower prices are “still possible,” to $6.910 and $4.530.

Others also see market support developing in the low $7 area. Phil Flynn of Alaron advises buying March natural gas at $7.10 with a stop loss order at $6.90.

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