Monday’s test of psychological support at $6, a nip in the air and a strong rebound in equities combined to push November natural gas futures higher on Tuesday. The contract, which expires Wednesday, put in a high of $6.302 before settling Tuesday’s regular session at $6.186, up 6.5 cents from Monday’s close.

Tuesday also saw the first real snowstorm or record for the 2008-2009 winter in the Northeast. Parts of New York, Pennsylvania, Vermont and New Jersey were being blanketed with the white stuff as a Nor’easter blew through. The expectation of home-heating natural gas demand coming on-line was seen as a possible driver for Tuesday’s rebound. In addition, commodities have been going as Wall Street has over the past few weeks and the Dow Jones Industrial Average’s 889-point (10.88%) gain on Tuesday was hard to overlook.

Some market watchers attributed the natural gas futures market’s movement to the normal volatility leading into a contract expiration.

Citi Futures Perspective’s Tim Evans said the natural gas market likely has some book-squaring to do ahead of the November contract’s termination on Wednesday. “Thin market conditions ahead of these expirations can contribute to price volatility and may not necessarily reflect fundamental developments,” he said. “In addition, we note that the market seems to have recovered from its initial disappointment over the coming warm spell in U.S. temperatures, and may even see some swing back in the other direction as the 11- to 15-day outlook seems less dramatically bearish than it did a day ago.”

According to Frontier Weather’s 11-to 15-day outlook, temperatures are seen averaging cooler than normal from the state of Washington to North Dakota, while above-normal conditions are forecast from the Ohio Valley and the Mid-Atlantic states through the Northeast.

Despite Tuesday’s gain in futures, traders see future weakness due to a deteriorating technical picture as well as temperature forecasts calling for milder conditions. “Following an ongoing cold spell that is moving across the Midwest and toward the East Coast, temperatures are expected to moderate during the next couple of days and to generally remain above normal through next week,” said Jim Ritterbusch of Ritterbusch and Associates. He added that any lower usage “should facilitate a couple more storage injections capable of delaying a normal early November supply peak.”

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