Impacted by the lack of lasting cold in many regions of the country as well as bearish performances by the petroleum markets, January natural gas futures following the Christmas weekend plummeted lower towards the psychological $6.00 mark.

With expiration right around the corner on Tuesday, January natural gas on Monday traded lower for the entire day, reaching a low of $6.12 before settling at $6.16, a 50.8-cent decline from Thursday’s settle. As the prompt month successor, February natural gas fell 52 cents to settle at $6.225.

“On the natural gas side, we were fairly busy in terms of volume,” said a Washington, DC-based broker. “Trading wasn’t really as light as you might of expected on this in-between week. Liquids were down big, which may of helped to influence natural to come lower as well.”

February crude ended Monday’s regular session $2.86 cents lower at $41.32/bbl, while January heating oil fell a whopping 11.53 cents to close at $1.2108/gallon.

“One of the more interesting things about Monday’s trade in natural gas was the gap down on the open,” the broker said. “We had a $6.63 low in last Thursday’s trade and had a high in overnight Sunday trade of $6.55. Not only does this gap lower have bearish implications, but we also gapped below the previous low on Dec. 8 of $6.495. We broke beneath the new low and we did it on a gap on the open. Everybody walked in and said ‘We don’t care, sell it low,’ and that’s obviously why we had a such a strong down day.”

The broker said that the $6 mark is now certainly in the crosshairs with a test of $5.78 a definite possibility. He noted that while this is not necessarily going to happen Tuesday in one fell swoop, it will likely occur in the near term.

“In addition, the weather jetstream is scheduled to invert back by the end of the week, so it will be 50-60 degrees in DC and balmy even up through New England,” he said. “The weather we have gotten to date hasn’t been enough to really generate heavy snow cover, nothing really lasting that would allow us to start to accumulate heating degree days.”

The National Oceanic and Atmospheric Administration (NOAA) said on Sunday that it expects the beginning of the new year to bring above normal temperatures to the entire East, along with the South Central portions of the country. The West and Midwest are expected to experience below normal temperatures for the first five days of the year.

Weather Derivatives Inc. of Belton, MO, said last week that forecasted heating demand in the Northeast this week will be 10% below normal. Demand in New York and Boston will be 14% less than the average for this time of the year, the group added.

Others forecasters concur. Weather.com reported that other than a few snow showers along the Canadian border Tuesday and Wednesday, the Northeast will enjoy a dry break through Thursday. Precipitation in the form of showers will return later Friday into Saturday with a cold front. But on average, temperatures will be above-average Wednesday through Saturday.

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