Those words of wisdom attributed to Mark Twain couldn't be truer than in the natural gas market.

Energy traders and meteorologists are expecting a cold winter, which means higher-than-usual natural gas prices. But recent weather reports combined with strong inventories have caused prices to drop.

That leaves everyone from the traders to government technocrats trying to predict where this volatile commodity could ultimately go.

On Monday, the New York Mercantile Exchange price of natural gas dropped 35.4 cents to close at $7.60. The dive comes after a 24- cent fall Friday, when gas closed at $7.95, the first time natural gas closed below $8 since Oct. 15.

But current gas prices are still 61 percent higher than last year. A large part of that run-up is due to predictions of a cold winter driving up gas demand.

Natural gas set for December delivery wasn't the only contract where prices pulled back. Contracts for delivery of the fuel early next year are down sharply, too. Since the beginning of this month, the January, February and March contracts are down $1.30, $1.31 and $1.04, respectively.

Don't be fooled into thinking the price will sink much further, though, Roland George, who heads up analysis of the North American natural gas market for Texas-based energy consultancy Purvin & Gertz, said.

A weak start to winter and strong inventory numbers have some traders reshuffling their natural gas positions, but George predicts prices will bounce again with the first sustained cold snap.

"We're seeing prices in the $8 range for December, January and February. In the 57-year history of our firm, these are the highest prices we've ever forecast," he said.

Consider this: Even in 2001, when price spikes led to a California energy crunch that blacked out parts of the state, the overall cost of natural gas that year averaged about $4. That's cheap compared to today's prices.

In dense urban areas where infrastructure issues can hamper gas maneuverability, such as New York City, even normal winter temperatures could lead to prices of $12 or $14 in that region, George said. An usually cold season could blow away the winter benchmarks.

"It all boils down to pain and suffering for the consumer and a big smile for the producer," he said.

According to the American Gas Association, 52 percent of U.S. homes are heated with natural gas. The Energy Information Administration estimates those homes' heating bills will be 15 percent higher this season than last.

In a report, private forecasting company Weather Services International says a warmer-than-normal outlook for November throughout most of the nation is slightly bearish for the natural gas market today, but colder-than-normal temperatures will emerge in December for much of the East and Southeast.

"We expect a pattern similar to the winter of 2002-03, although we expect this pattern to emerge later than it did in 2002, when the pattern for the winter had locked in by late October," Weather Services International's seasonal forecaster, Todd Crawford, said.

Art Gelber, head of Houston-based energy consultancy Gelber & Associates, said November is always the jitteriest month for natural gas, as traders try to get a fix on how cold the season could be and where regional demand could spike.

"I believe the price went up too far, too fast," Gelber said.

However, Gelber said, if this season's temperatures mirror the winter of 2002-03, which was colder than normal, the market needs to brace for that.

The latest downtick in gas prices comes on the heels of Energy Department reports that U.S. inventories are bulging at 3.3 trillion cubic feet, and Canadian stockpiles are almost full, too.

Gelber said inventories could be quickly eaten into in a colder- than-normal winter. In his extreme scenario, if this winter turns out similar to the winter of 2000-2001, spot prices could go as high as $16.50.