Trading for next-day gas Tuesday was highly skewed, with multi-dollar losses at some New England points contrasting sharply with gains of a few pennies at most market points. Overall, the market was down 4 cents to $2.52, but take away just three stout losses in the Northeast, and the average market change was a penny higher.

Weak next-day peak power helped drop New England prices, but otherwise, temperatures were close to seasonal norms. Futures trading added another uninspired session with May falling 0.4 cent to $2.640 and June falling $0.3 cent to $2.691. May crude oil dropped $1.08 to $47.60/bbl.

Wednesday gas deliveries at New England points fell hard as weather conditions across the country were forecast to advance above seasonal norms, and power prices fell. Forecaster predicted that the high in New York City Tuesday of 49 would reach 51 by Wednesday and 61 by Thursday, six degrees above normal. Chicago’s high Tuesday of 51 was expected to jump to 61 Wednesday and reach 62 Thursday, 9 degrees above its late March norm.

Next-day gas at the Algonquin Citygates tumbled $4.77 to $4.47, and deliveries to Iroquois Waddington lost 5 cents to $2.96. On Tennessee Zone 6 200 L gas changed hands $3.44 lower at $4.31.

Peak New England power plunged, but Mid-Atlantic next-day peak power was steady. Intercontinental Exchange reported on-peak power for Wednesday delivery to ISO New England’s Massachusetts Hub fell $23.13 to $43.00/MWh, and peak next-day power at the PJM West terminal rose 37 cents to $36.78/MWh.

Next-day gas in the Marcellus firmed about a dime, and observers attributed the rise mostly to weather. Wednesday gas on Millennium rose 8 cents to $1.88, and deliveries on Transco Leidy added 11 cents to $1.87. Packages on Tennessee Zone 4 Marcellus rose 13 cents to $1.76, but parcels on Dominion South were quoted 8 cents lower at $1.92.

“I don’t know of anything that is affecting those prices other than weather. Infrastructure is the same. We haven’t made any big changes,” said a Houston-based pipeline veteran.

As bidweek draws to a close NGI Markets Analyst Nate Harrison observed that only a few points showed a positive basis differential to the Henry Hub. “The forward market is showing all but the following five points in the red: Algonquin Citygates +0.686 Chicago Citygate +0.095, FGT Zone 3 +0.022, Michigan Consolidated +0.138, PG&E Citygate +0.310.”

Analysts suggest that maintaining any kind of upward price momentum “will be challenged by the likelihood of another counter-seasonal storage injection on Thursday. While our expected 7 Bcf increase is small, it would force further narrowing in the deficit against five-year averages,” said Jim Ritterbusch of Ritterbusch and Associates.

Others see a small withdrawal. Tim Evans of Citi Futures Perspective senses that there are “expectations that Thursday’s DOE storage report for the week ended March 27 will revert to a more typical seasonal withdrawal, with early estimates bracketing our own model’s 11 Bcf net withdrawal forecast. While less than the 22 Bcf five-year average decline for the date, the draw may be enough to hold sellers at bay for now. However, the temperature outlook still suggests above average storage injections going forward. We continue to view natural gas as arguably undervalued, but lacking a fundamental trigger that would set an upward correction in motion.”

First Enercast Financial calculates a draw of 12 Bcf.

“Our opinion of this market is in many ways analogous to that of the oil [market],” Ritterbusch said. “Although natural gas isn’t setting on a supply surplus, production is continuing to increase even as gas rig counts remain on the decline. But as is the case in the petroleum [market], we still see high probability of a price drop to the $2.50 area and possibly to as low as $2.40 if the next couple of months prove mild with limited elevation in CDDs or HDDs.

“Much of our bearish trading thesis across the coming month remains predicated on rising production that will be boosting injections with the longstanding supply shortfall against normal levels eventually being erased. While we will reiterate that we see no overcrowding as far as storage capacity is concerned next fall, we do feel that much smaller injections will be required to meet ample end-of-season supply than was the case last year. This, of course, should relate to a significantly lower pricing environment. We still see contango expansion ahead.”

Weather models turned slightly cooler overnight. WSI Corp. in its Tuesday morning report said, “[Tuesday’s] six-10 day forecast is a bit colder across the northern tier of the nation but warmer across the southern U.S. due to model trends. Period GWHDDs are nearly unchanged near 65 for the CONUS. Forecast confidence is average at best as medium-range models are in modest agreement with the general pattern.

“However, there remain key technical and timing differences with a frontal system across the northern U.S., which may lead to large variability due to a tight temperature gradient across the northern U.S. The southern U.S. has a slight upside risk, but the Northeast, Great Lakes and Midwest have a risk to the colder side.”

Tom Saal, vice president at INTL FC Stone in Miami, in his work with Market Profile sees pricing patterns developing that indicate less likelihood of still lower prices. “Counting four non-trend days (very unusual) signifies strong horizontal pricing at the bottom of the move. These non-trend days infer a lack of aggressive selling, most likely by speculators. Who else is there [to sell]?” he said in a Tuesday morning note to clients.