January natural gas is expected to open unchanged Tuesday morning at $2.23 as traders, for the moment, see a market capable of withstanding an onslaught of bearish weather forecasts. That may change in the next couple of days, they say. Overnight oil markets were mixed.

Natgasweather.com in a noon update Monday said nothing had really changed in the weather outlook until mid-month. “[D]ata continues streaming in, and we aren’t seeing any significant changes to the current bearish weather picture. Numerous weather systems are still expected to traverse the country; however, most importantly, they simply aren’t going to tap as much northern latitude cold air as needed to bring stronger than normal natgas demand over the northern and eastern U.S.

“Until weather systems start showing greater potential in entraining frigid air, weather sentiment should remain bearish. We still aren’t seeing the next opportunity for much colder temperatures until after Dec. 11-12th with much of the U.S. warmer than normal through then.

“Additional weather systems are expected to traverse the country this coming weekend and beyond, but the problem remains the same where they will each bring rain, snow and cooling, but far from being considered ominous without the northern latitude cold pool being tapped.”

Analysts see a resilient market for the time being, but the question remains: how long can it withstand an ever-increasing storage surplus? “This market has demonstrated resiliency so far this week in holding steady in the face of seemingly bearish weather outlooks. Updates to the one- to two-week views that are now stretching toward the middle of this month are still favoring above-normal trends, particularly across the upper Midcontinent in areas that would include major metropolitan cities such as Chicago,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients.

“Should these mild forecasts continue for another two to three days, the market will be forced to price in some sharply upsized supply withdrawals to be issued all the way out to Christmas eve…[A] record storage that had forced a sizable supply surplus is apt to see a further increase in the supply overhang. While an argument can certainly be made that occasional cold spells will be developing next month, such cold spells will likely be viewed as a requirement needed to reduce supply to manageable levels during next year’s injection cycle.”

Tom Saal, vice president at FC Stone Latin America LLC, in his work with Market Profile said to look for the market to test Monday’s value area at $2.245 to $2.227 and eventually test $2.336 to $2.294 and $2.504 to $2.458.

In overnight Globex trading January crude oil fell a penny to $41.64/bbl and January RBOB gasoline gained 4 cents to $1.3425/gal.