Physical natural gas for Thursday delivery advanced Wednesday as gains in the Midwest, Midcontinent and the East were able to tug slower performing regions such as California higher. The NGI National Daily Spot Gas Average rose 7 cents to $1.74, but futures were not as fortunate, posting their sixth loss in a row aided and abetted by forecasts of ever warming temperatures.

At the close, January had fallen 3.2 cents to $1.790, and February was lower by 2.0 cents to $1.866. January crude oil slumped $1.83 to $35.52/bbl.

With a lack of significant weather demand, analysts are taking a hard look at fundamental economics to determine what might at least stabilize prices if not set the groundwork for an advance.

“How do you price production to come off?” asked Energy GPS President Jeff Richter. “The answer is the Marcellus is trading $1.00, and assuming it costs 45 cents to go from the Marcellus to the Gulf, then $1.45 is where it has to go. You can’t break the price slide until you meet that marginal break-even point to signal production to turn off. As long as there are no restrictions to getting gas out of the Marcellus, that’s what you have to go to.

“A year ago you didn’t have to go there, because there were constraints getting that gas out of the Marcellus so Marcellus could sit at 65 cents and the Henry Hub could be $4,” said the consultant. “The moment you open that up, the low price doesn’t come meet the high price, per se. They have to meet somewhere in the middle. Everyone wants to see price stabilize, but it has to go to the stabilization point first.”

According to some analysts, that price for 2016 falls in the low $2.00 range. Analysts see the soft pricing currently in the Marcellus and Utica more widely spread next year.

“The price weakness was particularly acute in the Northeast, where the inability of the electric power sector to absorb additional supply forced producers to shoulder much of the accommodation,” said BNP Paribas’ Teri Viswanath, director of commodity strategy. “Looking ahead to 2016, it now appears that the sort of price weakness that has been endemic to the Northeast and Appalachian supply basins over the past year will likely spread more uniformly across the country.”

BNP revised its price forecast lower and predicts 1Q2016 prices averaging $1.95, 2Q2016 at $2.00, 3Q2016 at $2.40 and 4Q2016 at $2.70.

In physical market trading, next-day gas on the West Coast was generally higher as next-day power advanced. Intercontinental Exchange reported that on-peak power at NP-15 for Thursday delivery rose $2.00 to $32.50/MWh, and peak power at SP-15 gained $2.50 to $31.60/MWh.

Gas at Malin added 2 cents to $2.20, and deliveries to the PG&E Citygate shed 3 cents to $2.44.

At the SoCal Citygate, gas changed hands at $2.38, up 4 cents, and SoCal Border Avg. points rose 11 cents to $2.30. Deliveries on El Paso S. Mainline/N. Baja came in 4 cents higher at $2.33.

Loads, however, were forecast to ease. CAISO predicted Wednesday’s peak load of 31,602 MW would drop to 31,483 MW Thursday.

Most of the other trading centers saw prices advance. At the Chicago Citygates, Thursday gas added a dime to $1.85, and deliveries to the Henry Hub were quoted 3 cents higher at $1.68. Gas on El Paso Permian added 15 cents to $1.87 and gas on Dominion South shed 2 cents to $1.05.

Estimates of Thursday’s Energy Information Administration storage report are coming in well below last year and the five-year average. Last year 62 Bcf were withdrawn and the five-year pace stands at 120 Bcf.

ICAP Energy is calculating a 44 Bcf pull, and Stephen Smith Energy is looking for a withdrawal of 39 Bcf. A Reuters poll of 21 traders and analysts revealed an average 40 Bcf decline with a range of -28 to -67 Bcf.

“The forecast trends warmer yet again” on Wednesday, said MDA Weather Services in its six- to 10-day outlook, “with strong aboves now expected to be widespread across the eastern half. This includes readings averaging the period around 20 F above normal from the eastern Midwest to the Northeast. Temperatures are expected to peak out ahead of low pressure around mid-period.

“The large scale pattern producing this record warm pattern in the eastern half comes from features associated with the +NAO [North Atlantic Oscillation] along with Pacific flow induced by the strong El Nino. Models show good agreement in this regard, and confidence is high for this lead time. The Euro Op model brings additional warm risk to the East late in the period. The West carries warmer risks as well as this has been a bias among guidance in the presence of the Pacific flow.”