Despite blizzard-like conditions in and around the Great Lakes region, natural gas for Wednesday delivery took back some of the 68-cent gain posted in Monday’s trading as hefty multi-dollar losses in New England and the Mid-Atlantic were able to overwhelm a pattern of albeit much more modest gains in the Marcellus, Gulf, Midwest, Midcontinent, and California.

Overall the market shed 16 cents. Near term weather patterns continue to be the market drivers and forecasters do see a period of moderation ahead, but caution that the outlooks are more uncertain than usual and reservoirs of cold, Canadian air lurk just to the north able to march south at a moment’s notice. Weaker next-day power prices in the Northeast did not provide an incentive for incremental gas purchases, but temperature forecasts along the Eastern Seaboard continue to be supportive. At the close of futures trading December had retreated 9.7 cents to $4.244 and January was down 7.9 cents to $4.365. December crude oil fell $1.03 to $74.61/bbl.

Gas for delivery in New England and the Mid-Atlantic fell hard and fell often as power generators focused on tumbling quotes for Wednesday peak power and studied updated weather forecasts calling for somewhat tempered readings. IntercontinentalExchange reported that next-day peak power deliverable to the ISO New England’s Massachusetts Hub fell a stout $10.56 to $70.12/MWh and peak deliveries to the PJM West terminal shed $1.09 to $65.08.

Market points in New England gave up about half of Monday’s gains. At the Algonquin Citygates next-day deliveries fell $2.25 to $8.53 after jumping $4.28 to $10.78 Monday. Deliveries to Iroquois Waddington shed 50 cents to $5.65 following a $1.60 gain to $6.15 Monday. On Tennessee Zone 6 200 L Wednesday parcels were quoted at $8.10, down $2.65, but that was on the heels of a $4.59 gain Monday to $10.75.

Natgasweather.com in a noon update reported cold followed by warming temperatures. “Temperatures will gradually start warming over Texas and the southern Plains in the days ahead as the coverage of the Arctic blast begins to release it’s grip. There will be one last surge of very cold Arctic air over the Ohio Valley and Northeast Thursday, including over interior production areas, which will continue to result in temperature anomalies of more than 20F degrees colder than normal.

“A rapid warm up will occur this weekend as milder weather systems coming off the Pacific allow temperatures to surge into the 70s and lower 80s over the southern US with 50s and 60s over the Ohio Valley and Northeast,” the company said.

Near term temperature forecasts call for temps to remain below normal along the Eastern Seaboard. Wunderground.com forecast that Boston’s high of 43 Tuesday would drop to 34 Wednesday before rising back to 43 Thursday. The seasonal high in Boston is 51. New York City’s 45 high Tuesday was expected to fall to 32 Wednesday before climbing back to 43 Thursday, 10 degrees below normal. Philadelphia’s 41 high on Thursday was predicted to slide to 33 Wednesday before rising to 42 Thursday.

Quotes for delivered gas in the Mid-Atlantic also fell. Wednesday packages of gas bound for New York City on Transco Zone 6 plunged $3.07 to $6.33 and deliveries to Tetco M-3 dropped 35 cents to $4.32.

Other eastern points such as the Marcellus posted solid gains. Deliveries on Millennium added 7 cents to $3.52 and gas on Transco Leidy rose 25 cents to $2.82. Gas on Dominion South fell 14 cents to $3.69, but packages on Tennessee Zone 4 Marcellus added 11 cents to $2.75.

Producing Zones demonstrated solid, but less flamboyant gains unable to offset eastern declines. Gas for Wednesday on Transco Zone 3 rose 6 cents to $4.32 and deliveries on Columbia Gulf Mainline added 6 cents to $4.28. Packages at Tennessee 500 L tacked on 4 cents to $4.29 and at the Henry Hub gas changed hands at $4.32, a dime higher. At Katy next-day deliveries added 4 cents to $4.26.

If analyst’s assessments are correct it may be a while before the market can rationalize beginning inventories at a lower level than last year with a cold, early start to the heating season along with increased production. Relatively modest changes in weather forecasts are capable of providing out-sized price movements.

“On balance there were surprisingly little net demand changes in the overnight weather models, with variations largely the result of timing adjustments,” said Teri Viswanath, director of natural gas trading strategy at BNP Paribas. “That being said, the models have persistently reflected an upper-level pattern that is more conducive to warmth east of the Rockies for early December. And it is this pattern that the market glommed onto in early trading as a justification to sell into. Warmer changes in the midday model run have subsequently provided a further excuse to extend the morning sell-off.

“Without a doubt, this is the most volatile start of the winter that the market has ever witnessed. What’s more, the explosive moves in natural gas prices will likely continue until the market has sufficient empirical evidence that a surfeit of winter supply exists. We suspect that the summer inventory shortfall coupled with a very cold start to the winter will continue to resurface repressed market memories of last winter. No doubt the uncertainty about the winter ahead will continue to trigger wild swings in natural gas futures, with fickle short-term forecasts providing a daily excuse for a street brawl over seasonal supply/demand balances.”

That fickleness is apparent in the longer term, 10-to 15-day models, which are becoming less certain especially in the latter period of the forecast. In its morning 20-day Energy Outlook meteorologist Joe Bastardi of WeatherBELL Analytics said “[There is] Major mayhem in modeling, [and] I don’t trust any of them after Day 10. [The] Fear in Days 10-15 is that it will be colder over the East, [and] the trough in the 8-12 Day may be as strong as now, with arctic air back involved.

“Hold on, we are going to continue to blend in our chief analogs to help us with what is a period where all the models are all over the place in the longer term. For example, by Day 15, the ECMWF [European model] looks extremely strange…[and] all the references to the pattern in 1976 did at least work for the month of November.

“The warmup is reversed, with the threat of arctic air in Week 2 getting involved again (not initially with the first storm that pulls up). Use our analogs to factor into the models and any warm up to above normal [becomes] talk for anything more than a few days in this pattern for almost everywhere in the U.S. It has to be tempered with the realization that there is a lot going on that the models may not be able to handle,” said Bastardi. “That is not to say we have to be right, it does say when you here talk of warmer against the normal be cautious. After all it will be hard to be as cold as what we have gone through the past 10 days.”

WeatherBELL calculates well above normal accumulations of heating degree days (HDD). For the next 15 days WeatherBELL says nationally expect 360.7 HDD, well above last year’s 334.2 and a long term average of 284.6 HDD.

If weather model uncertainty wasn’t enough for traders to handle, “This market continues to swing violently in both directions driven by updates to the short term temperature views. Weekend adjustments tilted short term outlooks bullish as this week’s trends are likely to be colder than previously expected,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Monday. “Furthermore, next week’s expected cold deviations from normal are much larger than those anticipated last Friday. As a result of the extreme volatility, Nonetheless, we are maintaining our expected trading parameters and it would appear that the high side of our expected high price parameter of 4.25 was violated today just as the previous low side of about $4.05 was taken out late last week.

“Fundamentally, a supply deficit of 6-7% is still going head to head with a record pace of production that is exceeding year ago levels by some 6 ½ -7%. Looking ahead to Thursday’s storage release, we will be looking for a decline of about 5-6 Bcf that will likely be followed next week by a huge supply drop possibly approaching triple digits that will expand the supply deficit considerably. Meanwhile, we are still looking for a place to re-establish some longer dated bull spreads but we will await a return to a $3 price.”