Continued volatility attributed to front-month expiration saw natural gas futures rocket over the $6/MMBtu mark in early trading Tuesday. Coming off a 56.6-cent gain in the previous session, the October Nymex contract was up an additional 30.4 cents to $6.010 at around 8:45 a.m. ET.

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November was trading at $6.033, up 30.2 cents.

After a massive move higher Monday coinciding with options expiration, and with the final settlement of the October contract Tuesday, analysts at EBW Analytics Group cautioned that “further sizable moves are possible, particularly later in the day.”

The “proximate cause” for the recent rally is end-of-month positioning, the analysts said, but the prospect of additional liquefied natural gas demand amid “rumors that Sabine Pass Train 6 was firing up yesterday likely added more fuel to the amped-up rally.”

A pullback in prices “appears increasingly possible” as November transitions to the front month, according to the EBW analysts. 

“From a fundamental perspective, Nymex natural gas futures are approaching our probability-weighted scenario analysis fair value of $6.00-6.50,” the analysts said. “The high volatility roller coaster, however, is likely to continue. If Sabine Pass feed gas demand ramps up to new highs — signaling Train 6 starting up — or the forecast for the back half of October trends colder, natural gas could rapidly take another leg higher.”

Trends in the weather data overnight resulted in only slight changes to the outlook, with the major models still advertising a bearish pattern for the United States overall through mid-October, according to NatGasWeather.

“We continue to look to the last 10 days of October for the first real threat of widespread freezing temperatures across the northern U.S.,” the firm said.

NatGasWeather pointed to tightness in overseas markets in Europe and Asia as a driver of the spiking prices domestically.

“Now that bulls have emphatically regained control and pushed prices to highs of the past decade, we look to see if prices hold $6,” the firm said. “We expect how high U.S. prices go will be dictated by whether Europe prices continue to rise, which is possible due to the potential for moderate to major issues there this winter.”

Meanwhile, Wood Mackenzie’s daily pipe production estimates showed a roughly 1.6 Bcf/d day/day decline in Lower 48 output as of early Tuesday, down to around 91 Bcf/d from 92.7 Bcf/d on Monday.

Wood Mackenzie analyst Laura Munder said declines were observed in the Haynesville Shale (about 340 MMcf/d), Texas (about 585 MMcf/d) and the Northeast (about 620 MMcf/d).

November Nymex crude oil futures were up 63 cents to $76.08/bbl at around 8:45 a.m. ET.