December natural gas is expected to open unchanged Wednesday morning at $2.32 as traders continue to digest an unsupportive weather outlook along with deteriorating technicals. Overnight oil markets eased.

Overnight weather models moved in the direction of milder temperatures in the key energy markets of the Midwest and East. “The next five days saw some additional cooler tweaks across the Midwest and East at times, but the bulk of the changes skewed in the warmer direction for the next two weeks,” said Commodity Weather Group in its morning report.

“The warmer changes begin early next week and extend through the six-10 day. Highs are again expected to push up into the 60s for the East Coast cities, while 50s are a little more common in the Midwest. The South, meanwhile, remains stormy. This led to some slight cooler changes for Texas, though with an upper-level low wobbling through, the details are still uncertain.

“Looking out to the 11-15 day, the models remain in relatively good agreement on a warm East and cool West. While the GFS [Global Forecast System] leans a little cooler, our preferred outlook hedges toward the warmer European, which resulted in some additional warming of the East Coast again today. The continued model agreement, however, did inch up confidence,” said Matt Rogers, president of the firm.

Market technicians versed in Elliott Wave and retracement analysis see little change in the trading landscape, and unless certain conditions are met, prices are likely to trend lower.

“No change,” said Brian LaRose, a market technician with United ICAP, in closing comments to clients Tuesday. “$2.441-2.484 represents the highest levels consistent with any wave four correction in a continuing five-wave decline from the $3.102 high. $2.723 represents the highest level consistent with any wave two correction in a subdividing five-wave decline from the $2.934 high. [We] see a breach of these levels as the only way to void our bearish models. Until then, the trend is down.”

The near-term market may be problematic for some, but longer term the outlook is positive. The International Energy Agency forecast Tuesday in its World Energy Outlook 2015 that by the mid-2020s, coal will be supplanted by natural gas as the largest source of U.S electricity generation and by the mid-2030s, gas will overtake oil as the most utilized fuel in the nation’s primary energy mix. (See Daily GPI, Nov. 10). According to the report, the worldwide outlook for natural gas supply and demand mostly is optimistic, but concerns about methane emissions and their impact on the environment are growing, researchers said.

In overnight Globex trading December crude oil fell 67 cents to $43.54/bbl and December RBOB gasoline fell fractionally to $1.3436/gal.