Physical natural gas prices for Wednesday delivery edged lower on Tuesday as traders wrestled with cold and snowy conditions in the Northeast and Mid-Atlantic and market centers in the remainder of the country experienced generally soft pricing.

With Tuesday’s nor’easter ending up smaller than forecasters had expected, most prices in New England and the Northeast came off, and were joined by smaller losses in the Midwest, Midcontinent, Texas, Louisiana, the Rockies and California. TheNGI National Spot Gas Average fell 1 cent to $3.33.

Futures bulls found the air a little thin above $3 and prices retreated. At the close, April had fallen 10.5 cents to $2.938 and May had given up 11.4 cents to $2.993. April crude oil shed 68 cents to $47.72/bbl.

The cold in the Northeast had buyers working their sources over the last few days, and at some points next-day gas remained loftily perched close to $8. “In this case, I think everyone was expecting the worst,” said a Houston pipeline veteran. “I don’t think anyone was expecting the weather to be less than what the forecasters were saying… I’m not sure if buyers have had good luck or bad luck with the weather forecasts. They generally go off temperatures and wind and things like that.”

Gas at the Algonquin Citygate dropped 11 cents to $7.95, but packages delivered to Iroquois Waddington tumbled 94 cents to $4.83. Gas on Tetco M-3 Delivered rose 8 cents to $4.82, and gas headed for New York City on Transco Zone 6 dropped $1.05 to $5.66.

“Demand a lot of times drops because people stay home, industries shut down, and nobody can get to work,” said the trader. “Stores are fairly quiet and people are staying inside.

“You are going to pull the most you can out of storage, pipes are maxed out, incremental supplies are flowing into Dracut and LNG is probably flowing pretty strong right now. The lines are long at McDonalds. It’s a busy time, but it’s not like there is no backup supply. I’m sure the city people are loving it since they can pull out their storage,” the veteran added.

Tuesday was a good day to stay indoors if you are in the Northeast, “A major winter storm is unfolding across the northeastern United States and will bring travel to a halt as it dumps heavy snow across the region,” said meteorologist Brian Lada.

“Thousands of flights were canceled, and school districts across the entire region were closed in advance of the nor’easter. Several states have declared a state of emergency, including New York and New Jersey.”

Leading snow accumulations include Damascus, PA, at 30 inches and Norwich, NY, with 24 inches.

“Elsewhere in New England, powerful winds toppled a wind turbine in Point Judith, Rhode Island, while a 70 mph wind gust was reported on Cape Cod,” Lada said.

Futures traders had to come to grips with a highly variable weather pattern through the end of the month and an uncertain storage impact resulting from the eastern blizzard.

Analysts say not to discount the near term cold too heavily. “[W]e feel that much of the past week’s strength has been technically motivated with our expected resistance at the $3.09 level halting [Monday’s] advance,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Monday. Support at about the $2.82 mark should be forthcoming until the weekly EIA storage numbers are released later in the week. The market is likely discounting a withdrawal of around 50 Bcf. But surprises on the bullish side will likely pack more punch than an equivalent-sized miss on the bullish side given current upward momentum.

“A focus shift also appears to be taking place with the market now paying more attention to power demand, production and exports. While conventional thinking would suggest that this late-winter rally that is developing amidst a 363 Bcf surplus is insufficient to sustain price rallies, the possibility that this supply overhang could be shaved by as much as 100 Bcf due to the colder weather is a force to be reckoned with for the time being.”

Traders can expect a series of volatile weather patterns going forward. “[A] potent winter storm and cold blast will hammer the Mid-Atlantic and East this week, but then with a milder break late this coming weekend,” said in a Tuesday morning report.

“Another cold shot is still expected across the northern U.S. March 22 -23rd, but with important details in need of refining. A colder trending system March 24-26th is to be followed by a mix of mild and cool periods March 27-31st , although being a touch milder over the east-central U.S. in overnight data.”

Tom Saal, vice president at FCStone Latin America in Miami in his work with Market Profile expected the market to test Monday’s value area at $3.056 to $3.038 and “could test” $3.013 to $2.983. “Maybe” the market tests $2.963 to $2.937, Saal said in a Monday morning note to clients.