Natural gas futures bulls were unable to capitalize on Monday’s significant show of price strength Tuesday as values receded while cash market averages spiked higher. December natural gas futures closed the regular session at $4.530, down 8.4 cents from Monday’s finish.

Even as futures prices drooped Tuesday, cash market averages across the board — sparked by Monday’s 22.2-cent futures jump — added anywhere from a little more than 70 cents to the $1.10 area (see related story). The Henry Hub gained more than 80 cents to average $3.47.

“There’s not much to say for many of the energy futures markets because really nothing has changed,” said a Washington, DC-based broker. “Natural gas started weak and stayed weak on Tuesday. Despite the weakness, we’re not breaking new ground. Both gas and crude continue to trade in these ranges, making the action a snoozefest.”

She noted that some of the bulls had been getting their hopes up following Monday’s 22.2-cent rise. “There was some excitement on Monday, but no important price points were taken out, and as we saw Tuesday there was absolutely no follow-through. We are really just seeing a chop back and forth on low volumes. Technically, we’re in nowheresville.”

The broker added that people within the industry are continually looking out their windows for the first sign of weather. “Everyone knows there is a lot of gas in storage and they are just waiting for some of the cold winter forecasts to show up…or not show up. Everyone is thinking winter, but I’m still in flip-flops. Now it is still early November, but we haven’t even had a hint of real cold on the maps at all.”

She noted that the holidays right around the corner are likely at least partly to blame for the low volumes. “Next week the December contract expires on Tuesday; we have the Thanksgiving holiday Thursday, and a lot of my natural gas guys will be out Friday. I think we’ll see a lot of book-squaring going on early next week, but there is really not much impetus to do much else. I don’t think there is a lot of reason to trade here if you haven’t done anything for the last two weeks or so. Nothing is new.”

Temperature forecasts call for early moderation in the eastern and midwestern energy markets. MDA EarthSat in its morning six- to 10-day forecast said the period will start very mild for much of the eastern half of the nation. Areas in the East may not see very mild daytime highs, but overall average temperatures are still expected to be above normal while the warmest overall anomalies are in the Midwest and Plains. Hybrid Pacific and Canadian high pressure is expected to arrive in the West by the early to middle part of next week, providing modest below-normal temperatures.

Weather bulls hint that recent cool weather may set the tone for the remainder of the winter. “We have not yet had enough of a change in the weather pattern for us to believe that the colder-than-normal trend east of the Rockies has ended yet,” said Peter Beutel, president of Connecticut-based energy consulting firm Cameron Hanover. The EarthSat forecast notwithstanding, he suggested in a morning note to clients that “the latest set of forecasts seem to have thrust a dagger in the heart of the possibility that we would move to a more moderate framework. If temperatures do turn out to be colder than normal over the next two weeks (on balance), we would endorse the idea of temperatures continuing to trend towards the colder side through winter.”

Phil Flynn of PFGBest recommended buying “January natural gas at $4.67 — stop $4.50.”

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