Physical natural gas prices for Wednesday delivery were mostly unchanged in Tuesday’s trading. A few New England points saw some double-digit increases, but market areas in the Midwest and Great Lakes saw prices flat to a few pennies lower despite weather forecasts calling for significant near-term cooling.

Producing zones were mixed to a few pennies down. The overall market was down four cents. Futures bears, however, can’t seem to get enough of a good thing and relished forecasts calling for pervasive cooling. At the close, August had lost 7.7 cents to $3.772 and September was down 7.7 cents as well to $3.785. August crude oil shed 17 cents to $104.42/bbl.

Near-term weather forecasts call for temperatures well below seasonal norms in the Midwest and Great Lakes. Forecaster predicted the Tuesday high in Milwaukee, WI, of 88 would recede to 70 by Wednesday before perking up to 72 on Thursday. The seasonal high in Milwaukee is 80. Chicago’s Tuesday high of 90 was anticipated to drop to 71 Wednesday and Thursday. The normal mid-July high in Chicago is 84. Detroit’s maximum Tuesday of 90 was anticipated to plunge to 74 Wednesday and 77 rise to 77 by Thursday. The seasonal high in The Motor City is 83.

Forecasters in and around Chicago are focused near term on heat and humidity, but “after thunderstorms tonight [Tuesday]…we will have a couple days of dry and cooler conditions…followed by a return to a potentially more active pattern for the latter half of the week and through the weekend,” the National Weather Service in Chicago said.

Gas for delivery Wednesday at the Chicago Citygates was flat at $3.93, and packages on both Consumers and Michcon slid 4 cents to $3.99. On Alliance, next-day packages were unchanged at $3.94, and at Demarcation, gas for Wednesday changed hands at $3.92, up a penny.

New England market points proved to be the big gainers on the day. Gas for next-day delivery at the Algonquin Citygates rose 12 cents to $3.38, and deliveries to Iroquois Waddington added 11 cents to $3.98. Parcels on Tennessee Zone 6 200 L rose by 28 cents to $3.52.

Behind the headlines of turbulent futures and forwards markets along with seemingly unending forecasts calling for mild temperatures, storage operators have been like busy beavers, and although they started well back of last year, they are now working well ahead of last year’s pace. “Weather-adjusted storage injections have been strong in the East consuming region this year,” said Genscape. “Dominion Transmission injected 9.0 Bcf into the ground for week ending July 18th. This is lower than last week’s high injection of 10.0 Bcf, lower than a seasonal high of 13.0 Bcf but higher than the 2.0 Bcf of injection in the same gas week last year. Dominion Transmission’s gas inventory is currently at 163 Bcf [and] storage inventory is currently -74.0 Bcf lower than the same time last year.

“Columbia Gas injected 7.0 Bcf into the ground for week ending July 18th, [and] injections this year in the past two weeks is faster than the previous year [as] the injection for the same gas week last year was 2.9 Bcf. Columbia Gas inventory is currently at 125.0 Bcf, +93.3 Bcf higher than the low of 31.7 Bcf on April 4th. Storage inventory is currently -49.8 Bcf lower than the same time last year,” the company said in a report.

Gas for delivery Wednesday to Columbia Gas TCO fell a penny to $3.81, and deliveries to Dominion South added 4 cents to $2.74.

Producing Zones were mostly lower. Wednesday packages on Transco Zone 1 fell 2 cents to $3.76. At Katy, next-day packages came in at $3.82, down 4 cents, and gas at the Houston Ship Channel eased 3 cents to $3.83.

Analyst Alan Lammey at WeatherBELL Analytics sees the market as having one of those “ah-ha” moments. “One of the biggest driving issues behind the relentless selling action is that with market’s sudden epiphany that the coming cooler weather into early August, weekly storage injections will continue to outperform the historical averages. This weather information was forecast by chief meteorologist Joe Bastardi weeks in advance, but the larger herd mentality of the gas market lately typically tends to take a wait-and-see stance.”

Below-normal temperatures are expected to prevail, according to near-term weather forecasts. Commodity Weather Group in its six- to 10-day outlook showed a large ridge of below-normal temperatures stretching from eastern Wyoming to eastern Pennsylvania and from well north of the Canadian border to central Mississippi. “An impressive cool trough is expected to shift down into the Midwest for the six-10 day range with another round of moderate to much below normal temperatures,” said Matt Rogers, president of the firm, in its Tuesday morning report.

“Despite big picture agreement, there continue to be detail differences. The European guidance this morning backed away from bringing as much cooling to Texas in the six-10 day, for example, but skepticism abounds given the intensity of these cool events here in July. But there is general agreement at least that the Midwest to Tennessee Valley probably sees the coolest anomalies, regardless of how much reaches Texas and also the East Coast (weak cooling). Otherwise, the forecast edged a bit hotter today in the Southwest and California (especially one-10 day). The European ensembles show a potential warm push into the Midwest by late in the 11-15 day, which is a reasonable risk, but like the others, it would probably be a temporary situation.”

It is outlooks like these that have analysts revising their price forecasts. “Although [Monday’s] sharp selloff of around 10 cents was…around 2.5%, an additional 10 cent reduction in value appears likely possibly by midweek if mild temperature forecasts get stretched further into the first week of August,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Monday.

“The weekend updates favoring another major cool-down beginning later this week and extending through next week forced fresh six-month lows that in turn appeared to ignite another speculative selling spree. Although there has been a large speculative rotation toward the short during the past couple of months, it appears that large institutional traders have plenty of additional ammo to employ toward bearish strategies. Last week’s swing to contango in the front switch further reduces the appeal of short positions in reinforcing our expectations for a further price decline toward the $3.75 area. Thursday’s weekly EIA storage report won’t likely offer much assistance since the supply surplus will again be reduced sizable by around 55 Bcf, in our opinion. This summer dynamic of deficit contraction has been much stronger than expected as a result of mild weather conditions and as a result, we expect this market to be amply supplied when stocks peak in early November. We caution against attempts to pick a bottom to this sharp price decline.”