Despite a weekend blizzard in the Northeast and an oversold market after a 16% sliding the last six sessions, record high levels of gas in storage would temper any buying even if the weather stays cold.
After a mild start to the week, temperatures in the Northeast and Midwest, key gas consuming markets, were expected to cool to below-normal later this week and next week.
Relatively moderate weather, ample supplies and an escalation in the dispute over Iran's nuclear program should make for another week of high volatility. Absent geopolitical uncertainty, prices should be moving lower.
The weekly inventory numbers caught the market by surprise again. The unanimous UN decision demanding Iran stop nuclear enrichment probably rekindled concern that Iran will use oil as a political weapon.
The weather will be more seasonal over the next week but it will take much more than that to put a dent in supplies.
Still, brimming stocks should keep any rally in check, late week cold notwithstanding.
Milder weather forecasts for this week and extraordinarily high stockpiles continued to weigh on sentiment.
Once it gets back over the warm water of the Gulf it can gain strength and change direction. It doesn't look like it is headed for the big facilities in the Gulf, but we won't know for sure until the weekend when we can't do anything.