Physical natural gas for Wednesday delivery meandered higher in Tuesday’s trading amidst near-term temperature forecasts calling for above-normal readings in major energy markets, a directionless next-day power market, and a forecast that late cold will bring end-of-January demand above normal.

Prices at most points were higher by about a dime, with relatively little variation. The NGI National Spot Gas Average rose 9 cents to $3.18, and less than a handful of points followed by NGI slipped into the loss column.

Futures managed to give back a healthy portion of a 9-cent opening gain, and at the close February had added 3.6 cents to $3.279 and March was higher by 3.8 cents to $3.295. March crude oil gained 43 cents to $53.18/bbl.

“I think you’ve got one last shot higher, but you’ve got resistance at the $3.35 to $3.38 area,” said a New York floor trader. “I don’t like the chances of a long-term rally, but I’ll give it a few more days but as far as that goes, I don’t like it. I would sell $3.40s,” he said.

A Chicago-area analyst studying the relationship between winter and prior summer pricing expects summer 2017 prices to be relatively rangebound. “It looks like this winter will settle above the prior summer, and as of yesterday’s close November-through-March was around 82 cents above the summer of 2016,” said a risk manager with a prominent Chicago bank.

“I looked at winters where we finished about 70, 80 or 90 cents above the prior summer. What it said to me was that summer gas prices that follow a winter like this were very rangebound, and they almost finish the summer right where they begin the summer. Looking at where prices were on March 31 they were almost the same on Oct. 30. Absent anything else, maybe we are in for a relatively calm summer,” he said.

In physical market trading near-term temperature forecasts stayed above normal. forecast that New York City’s 37 high Tuesday would reach 48 Wednesday and climb to 49 Thursday, 11 degrees above normal. Chicago’s 39 high Tuesday was expected to rise to 42 Wednesday and then slip to 34 by Thursday, still 3 degrees above normal.

Major market trading centers, however, did manage to add about a dime. Gas at the Chicago Citygate gained 11 cents to $3.24, and deliveries to the Henry Hub rose 10 cents to $3.25. Gas on Panhandle Eastern changed hands 9 cents higher at $3.04, and packages priced on Kern River gained 11 cents to $3.25. Gas at the SoCal Border Avg. was quoted 12 cents higher at $3.41.

Eastern points showed relatively little change. Gas at the Algonquin Citygate was up a penny at $3.58, and gas bound for New York City on Transco Zone 6 added 4 cents to $3.12. Gas on Texas Eastern M-3, Delivery rose a nickel to $3.11.

Next-day power prices across the East were mixed. Intercontinental Exchange reported that Wednesday on-peak power at the Indiana Hub rose $4.68 to $40.43/MWh and next-day power at the ISO New England’s Massachusetts Hub declined by $2.18 to $32.52/MWh. On-peak Wednesday power at the PJM West terminal slipped $1.72 to $28.59/MWh.

The National Weather Service (NWS) predicted less-than-normal heating loads for the week. NWS forecast for the week ended Jan. 28 New England would see 193 HDDs, 90 fewer than normal, and the Mid-Atlantic was expected to have 176 HDDs, or 88 fewer than its normal tally. The greater Midwest from Ohio to Wisconsin was expected to see 186 HDDs, or 108 fewer than its seasonal quota.

One positive metric is that industry consultant Genscape forecasts “Lower 48 population-weighted HDDs will begin increasing Thursday and get colder-than normal by Friday. By Monday, Jan.30, HDDs are forecast to total 242 versus the norm of 234. Temperatures are expected to remain at seasonal norms through the first week of February.

“Genscape supply-demand forecast has demand rising from [Tuesday’s] estimated 78.2 Bcf/d to a high of 93.7 Bcf/d on Monday, Jan.30.”

Longer-term weather models call for cooling in the more deferred time periods amid hints of cold Canadian air working south.

“[Tuesday’s] forecast is colder than yesterday’s forecast across the northern and eastern U.S., as well as Canada,” said WSI Corp. in its Tuesday morning 11-to 15-day forecast. “The southern tier and West are warmer. CONUS GWHDDs are up 2.3 for days 11-14 and are now forecast to be 132.5 for the period.

“Other than the southern tier, there is a colder risk across the central U.S., Rockies and the Northwest, as well as much of Canada as arctic air may build and attempt to bleed southward.”

Traders see the March contract at risk once February goes off the board.

“This market has been able to sustain yesterday’s strong rebound off of the $3.15 area with some assistance from colder weather models that are beginning to suggest an arctic event that could develop beyond next week,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning report to clients.

That market strength will be contested by “a string of smaller than normal storage withdrawals that could be issued within the next three weekly EIA releases. With storage levels likely to swing back to a small surplus against five-year averages and with the market approaching the latter stage of the heavy usage cycle, a return to last month’s highs would appear to be off the table short of a major arctic event that could be sustained for more than a week.”

Ritterbusch notes that February and March are trading about even, but March “…will likely be more receptive to following cash pricing lower rather than higher next month as usual seasonal price premiums provide a cushion against any usage spikes during February.”

For the moment, money managers don’t seem to be buying into March weakness. In the Jan. 17 Commitments of Traders report “Money managers bought 25,789 contracts of natural gas in the week ended Jan. 17, with the group’s net long position the largest since June 2014,” said Tim Evans of Citi Futures Perspective in a report to clients following the Friday release of the data.

“While not necessarily an extreme within the established five-year range, we view the market as at least somewhat overbought.”