Natural gas futures were down sharply in early trading Monday as forecasters highlighted major warming trends from weather models over the holiday weekend showing mild temperatures well into January. 

NGI Morning Natural Gas Price & Markets Coverage

As of around 8:50 a.m. ET, the January Nymex contract had plummeted 26.3 cents to $2.255/MMBtu. February was down 22.8 cents to $2.284.

Models over the weekend shifted toward a stronger positive Eastern Pacific Oscillation and a weaker North Atlantic Oscillation (NAO), signaling more warmth, according to Bespoke Weather Services.

The changes “resulted in a massive decrease” in the firm’s forecasted gas-weighted degree days (GWDD), “as the next two weeks alone look to be 25-35 GWDD warmer, or roughly 60-70 Bcf,” Bespoke said. “…Perhaps the back half of January can at least get back toward normal, but the first half now looks very solidly warm.”

Weaker prices as the market digests the milder temperature outlook should “tighten balances once again, so if the blocking can ever finally at least back us away from the high-end warmth, there may be a good buying opportunity soon.”

The latest forecast maps from Maxar’s Weather Desk early Monday showed warmer-than-normal temperatures sprawled across the eastern two thirds of the Lower 48 from Jan. 7 through Jan. 11.

“The forecast is largely warmer when compared to expectations from late last week for this time frame,” Maxar said. “…Much above normal temperatures are in the Midwest and East, while near normal readings are in the West.”

In the updated six- to 10-day window, running from Saturday through Jan. 6, Maxar said its forecast came in “significantly warmer” compared to last week’s projections.

“Much and strong above normal temperatures are along the East Coast at the start of the period, along a storm system tracking through,” the forecaster said. “While temperatures cool in its wake, aboves look to be retained for most of the period here. Any below normal temperatures accompany high pressure in the South Central early, but more widespread above and much above normal coverage is gained across the Midcontinent and points eastward during the second half of the period.”

The sell-off on milder weather trends saw the February contract crash through a key technical target identified by analysts at ICAP Technical Analysis.

“Bulls will need to keep the February contract above $2.414-2.407-2.393 if they want to avoid another round of fresh lows,” ICAP analyst Brian LaRose told clients in a note Sunday. “While that gives the bulls some room to maneuver, it is not much. In the event the bulls are unable to pull natural gas out of this tailspin the door will be open for a drop to the $2.182-2.178-2.176-2.119 neighborhood.”

February crude oil futures were up 9 cents to $48.32/bbl at around 8:50 a.m. ET, while January RBOB gasoline was off fractionally to $1.3787/gal.