Natural gas futures plunged 9.5 percent Tuesday as the prospects for a last winter freeze faded, and traders were looking forward to the possibility of El Nino this summer.
"For the most part, winter is pretty much done," said Josh Senechal, Genscape meteorologist. He said there is the potential for a brief cold spell moving into the East this weekend bringing temperatures closer to normal, but otherwise the outlook for the East and Midwest is warmer weather.
Natural gas futures for March plummeted 9.5 percent to $2.56 per MMBtu. Futures were nearly 1 percent higher Wednesday.
Natural gas was down about 7 percent last week on the combination of strong supply and warm weather and is now 35 percent below the winter peak late last year. Gas in storage is also running above the five-year average.
Analysts, however, say the market has not bottomed, with $2.50 per MMBtu as the next near-term target with $2.25 to $2.30 in sight. According to analytics firm Kensho, in the week after a one-day 9 percent decline, natural gas tends to continue sliding, with further losses 70 percent of the time and a net decline of 1.7 percent. The market has experienced 13 such declines since 2005.