Cash prices overall gained about a dime at most points, but if a handful of New England and highly volatile eastern points are factored in, the national average gain on Monday for Tuesday delivery came in at just under a penny.

For the most part cash prices marched higher following a Pied Piper-like calling from early screen strength. Gains were widespread with only a few Northeast points not participating. At the close of trading February futures slumped 2.1 cents to $3.266 and March shed 2.2 cents to $3.281. February crude oil fell 10 cents to $93.19/bbl.

New England points fell as forecasts called for a short-term warming trend to settle in before the arrival of a juggernaut of arctic air later in the week.

“Temperatures will surge over much of the eastern two-thirds of the nation this week into the weekend of Jan. 12-13, 2013, before the advance of arctic air. Steering winds, known as the jet stream, will retreat northward from the Rockies and Plains to the Midwest, South and Mid-Atlantic,” said meteorologist Alex Sosnowski.

He noted that “average temperatures are usually at their lowest point during this part of January. However, temperatures will trend to 10 to 20 degrees above normal during the warmup event. Places without snowcover will warm up the quickest.

Quotes on New England pipes were sharply lower. Next day gas at the Algonquin Citygate was seen $1.66 lower at $4.75 and gas into Iroquois Waddington slumped 72 cents to $4.45. Deliveries on Tennessee Zone 6 200 L tumbled $1.48 to $4.71.

On Dominion gas for Tuesday delivery was 3 cents higher at $3.15 and deliveries into Tetco M-3 added 6 cents to $3.52. Gas bound for New York on Transco Zone 6, however, nose-dived about 46 cents to $4.35.

Falling power prices also helped tug next-day eastern gas lower. IntercontinentalExchange reported that at the New York Independent System Operator Zone G trading point peak power for delivery Tuesday fell $9.80 to $45.20/MWh and at the New England Power Pool’s Massachusetts Hub peak day-ahead locational marginal prices fell $14.13 to $43.00/MWh. At the PJM Western Hub peak power for Tuesday delivery fell $3.56 to $32.61/MWh.

February futures peaked at about 9:23 a.m. EST at $3.352, up 6.5 cents from Friday’s settlement, and cash market quotes promptly followed suit. Once early cash trading was completed, February slipped into negative territory about 12:30 p.m. and never looked back.

Texas points posted double-digit gains. NGPL TX OK was seen 13 cents higher at an average $3.26 and gas at Carthage added 11 cents to $3.25. Deliveries on El Paso Permian were quoted 13 cents higher at $3.31.

At Katy Tuesday gas came in at an average $3.27, up 9 cents, and at the Houston Ship Channel buyers had to pay an extra 15 cents at $3.23. On Transco Zone 1 next-day deliveries fetched $3.27, 14 cents higher.

Rockies gains mirrored those of Texas points. At Opal Tuesday gas was seen 12 cents higher at $3.34 and on CIG Mainline next-day gas was quoted at $3.30, 12 cents higher. On Northwest Pipeline Wyoming Tuesday deliveries came in 13 cents higher at $3.31.

The late session futures slump has traders thinking lower. “We were trading at $3.34 to $3.35 [February] and then the market fell out of bed and we were at $3.245 to $3.25. It looks like $3.30 to $3.10 is the trading range, and I think we will push a little lower over the next few days,” said a New York floor trader.

“We’re supposed to be up to 50 degrees Tuesday through Saturday and then it is supposed to get cold, but I don’t think it is supposed to last more than 4 to 5 days.”

Commodity Weather Group in its six- to 10-day forecast shows below-normal temperatures throughout the western two-thirds of the country, but the lower Mississippi Valley, Ohio Valley and points east are expected to be above normal. “The highest confidence for the six-10 day is for eastern warmth and western cold. But the toughest and lowest confidence area is in that middle third of the U.S. that includes key energy-consuming areas like Chicago and Texas,” said Matt Rogers, president of the firm.

“These central regions will be dealing with tricky frontal boundaries that could move faster or slower as they gradually try to erode the eastern warming ridge with the pattern adjustment. Increased high-latitude blocking will eventually give these colder air masses and associated cold fronts more muscle to push their way into the East and the rest of the South in the 11-15 day. We favored the slower timing of the European ensembles, but given the pattern trends and upper-level support, the risk is probably to the colder side by especially the 11-15 day.”

One contingent doesn’t see the near-term outlook as supportive. “Weather forecasts continue to provide little support for rising gas prices, with above- to well above-normal temperatures expected across the East in the next 10 days,” said Addison Armstrong of Tradition Energy. “Temperatures are then expected to shift colder for the latter part of January and the beginning part of next month, which should provide some support for gas prices.”

Others see a slightly supportive tone to the weather forecasts. “Weather remains the primary driver of natural gas pricing with weekend updates to the eight-14 day views offering some additional price support,” said Jim Ritterbusch of Ritterbusch and Associates. “Below-normal temperatures that are enveloping the western half of the nation will generally be working into the Midcontinent by next week. However, the heavily populated eastern seaboard is expected to remain comparatively mild.

“Furthermore, exceptionally warm trends this week that will see Chicago approaching 50 degrees will still need to be factored into the EIA release of a week from Thursday. It should also be kept in mind that a substantial supply surplus of around 390 Bcf (12%) is likely to remain intact with this week’s number with the surplus stretching appreciably next week. All in all, the temperature factor appears to be taking on a slightly bullish appearance capable of supporting nearby futures well above last week’s lows but unable to sustain price gains much above the $3.36 area.”

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