May natural gas is set to open 7 cents lower Monday morning at $2.64 as bears wet their whistles looking for a lower technical regime and weather forecasts remain seasonal. Overnight oil markets jumped.

Market technicians suggest that the failure of futures to move lower might just be the catalyst to eventually turn the market higher. The problem is that it isn’t happening.

“Last week double-bottomed against the 6th February lows,” said Walter Zimmermann, vice president at United ICAP. “I have been emphasizing that natgas is a market glutted with speculative shorts and that the seasonal risk is to the upside into mid-May. The last time natgas hit a new low was 6th February. All those bears are not onboard for congestion. Is the patience of the bears being tested? You bet it is. Just look at Thursday’s price action. The bears are not happy,” he said in a weekly analysis for clients.

The market, however, is perilously close to a technical threshold. “For three months now, spot natgas has been sitting on the critical $2.580 support that is the must hold for the case for a major multi-year rally. This fact is both the hope for the bulls and the danger for the bulls. It is the hope because that key $2.580 support continues to hold. It is the danger because after three months of merely holding the must hold, there has been no traction to the upside. Zero. Critical support should propel prices higher.”

Buyers for gas-fired generation across the PJM footprint will have only moderate amounts of renewable generation to deal with for the early portions of the week. “Variable cloud cover and spring like temperatures are expected much of [Monday] with highs in the 60s and 70s,” said forecaster WSI Corp. in a Monday morning note to clients. “An upper-level disturbance and a frontal boundary will lead to periods of rain tonight through Wednesday. A developing east-northeast breeze behind the front will usher cooler air into parts of the Mid Atlantic and northern tier of the power pool by the middle of the week, [and] a better defined frontal system is expected to traverse the power pool during the end of the week with more showers and thunderstorms, which may be strong. Rainfall amounts may range 0.5-2 inches, highest west.

“A south-to-northeast wind will support modest wind generation through the middle of the week with output around 2 GW. The expected frontal system should drive up wind generation during the end of the week with output upward of 3-5 GW.”

Tom Saal, vice president at INTL FC Stone, in his work with Market Profile has a somewhat different take on the market. “Market Profile shows the price the market says is ‘true value,’ aka the mode (most frequent price) for the May 15 contract. The mode is $2.853; prices should revert towards that price until the market seeks another ‘true value.’

“Remember…the market determines ‘true value;’ everything else is just an opinion about true value,” he said in a Monday morning note to clients.

In overnight Globex trading May crude oil added $1.07 to $50.21 and May RBOB gasoline gained 4 cents to $1.7977/gal.