Physical gas prices nationally fluctuated within a few cents of unchanged and closed slightly lower by about a penny in Monday’s trading as temperatures were expected to trend toward more seasonal readings in the Northeast and Midwest markets. Texas and the Gulf Coast edged lower, but Southern California points were steady to higher. At the close of futures trading May had risen 1.8 cents to $2.107 and June had gained 2.2 cents to $2.223. May crude oil closed the day down 85 cents to $102.46/bbl.

At Northeast points, quotes were varied as forecasters cited slim chances of any repeat of March warmth and noted that spring snow, wind and rain were more likely. “After a snowy Easter Sunday across Maine, other parts of the Northeast and Great Lakes will see snowflakes fly as this week progresses,” said AccuWeather.com meteorologist Kristina Pydnowski.

A repeat “of March’s unusual and record warmth is not on tap to follow Easter Sunday across the Great Lakes and Northeast,” she said. “Instead, a stubborn storm will make cooler temperatures, brisk winds and spotty showers the norm through Tuesday across the Great Lakes. The Northeast will have to deal with the unsettled weather into at least Thursday. With enough cold air in place, some areas will see the rain showers mix with or fall as snow on one or even several occasions.”

Deliveries to the Algonquin Citygates and Tennessee Zone 6 200 L fell about 7 cents, but gas into Iroquois Waddington added nearly 4 cents. Highs in Boston for the week range from the mid to upper 50s, slightly ahead of seasonal norms, said AccuWeather.com.

Gulf Coast points showed some strength as pipeline constraints limited supplies. “On [Florida Gas Transmission] Zone 3 we are seeing pipeline constraints until [April 14],” said a Florida utility buyer. Prices were up almost nickel to $2.27 on Florida Gas Transmission Zone 3, but “we’re seeing [more westerly] Zone 1 at $2.05-2.07 and Zone 2 at $2.03-2.05.”

Other Gulf points were weaker. Deliveries to Tennessee 500 L fell a couple of pennies and gas into Texas Eastern E LA fell a nickel. Henry Hub rose a penny.

Changes at Texas points mirrored price changes nationally for the most part. NGPL South Texas, Katy, and the Houston Ship Channel were all off about a penny. Waha fell about 7 cents.

Deliveries into Southern California points were steady to higher. El Paso Mainline South and SoCal Border were up by 2 cents, and SoCal Citygate posted close to a 6-cent gain.

Futures observers don’t see any factors capable of pushing prices substantively higher. “It’s difficult to see how you are going to get much of a rally in view of the fact that demand is quite strong as it is,” said a Washington, DC, broker. “We are coming into a shoulder season, so where do you get your demand zip from? Also the financial press is claiming the death of the American economy because of the [latest] jobs report.”

The Dow Jones Industrial Average fell 131 points to 12,930 on Monday. On Friday the Labor Department reported an increase in March nonfarm payrolls of 120,00, well below the 200,000 the market was expecting. The unemployment rate declined nominally to 8.2% from 8.3%.

“Buyers are looking at the same things futures traders are. [Saying things such as] ‘I got $2.11 this morning, and I can get $2.06. Do you think someone will be a buyer, if they can get $1.99?,'” the broker said.

Risk managers are not excited about the prospects of having to protect clients against further price erosion, but DEVO Capital’s Mike DeVooght suggested a strategy utilizing October put options.

“At this time, and at these price levels, we are not excited about establishing new hedges here. On a trade basis, we will continue to hold current positions and view any significant rally from current levels as an opportunity to do some forward sales in the summer strip,” he said. As a precaution he “purchased October $2.50 puts [at 25-27 cents] to cover the summer strip [and] will use a stack-and-liquidate strategy.” For end-users and trading accounts, he advised standing aside.

The market is problematic, he said, at least for those on the long side, and what could portend further weakness is a possible softening of the economy. “Natural gas settled at new contract lows, and the weekly gas storage number was considered negative because of a higher-than-anticipated build. The gas market has not done well, even with expectations that the U.S. economy is expanding. It’s hard to imagine the gas market doing well if there are signs that the U.S. economy is starting to decelerate.”

Near-term weather forecasts call for above-normal temperatures, but differentials are not expected at the blistering pace of March. WSI Corp. of Andover, MA, in its six- to 10-day outlook shows above-normal temperatures east of a sinuous line extending from Montana to Kansas to West Texas with the greatest concentration in the Southeast.

“Temperature anomalies of 8-10 degrees above normal are expected in the Southeast. Most of the east-central U.S. should also run warmer than normal. Confidence is near to above average with good large-scale model agreement; temperatures could still run warmer along the East Coast than currently indicated. The Southwest and Great Basin may trend cooler. All models generally agree on only a slowly de-amplifying pattern featuring a deep trough over the southwestern U.S. and an Eastern ridge.”

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