March natural gas is expected to open 3 cents lower Wednesday morning at $2.00 as most weather models can come up with no convincing pattern capable of significantly shifting the supply-demand balance. Overnight oil markets were mixed.

Not all weather models show market-crushing moderation, however. Forecaster Natgasweather.com in a noon update on Tuesday said the Global Forecast System shows “a strong winter storm the next few days across the central U.S., then a glancing blow of frigid Polar air across New England this weekend, but not pushing far enough south to impact major Northeast cities. It then follows with the polar outbreak next week, although less cold than the overnight run. It shows a brief break at the end of next week before another polar blast arrives across the northern U.S. Feb. 14-15. Essentially milder days eight-11, then much much colder days 12-15. This solution is quite a bit different than recent runs and is considered an outlier for now, but does highlight that warming after next week isn’t a given.”

Despite the continued erosion of futures prices, analysts remain optimistic for the second half of 2016. “Front month averaged $2.23/MMBtu in January, which was a little under our $2.30/MMBtu target but within range considering the bearish weather patterns the market had contend with,” said Breanne Dougherty, an analyst with Societe Generale in New York. “The March contract is now in the front month position and it saw some brief support at the end of last week, but that support seems to have disappeared with the softer weather outlook.

“Unfortunately, the market continues to move aggressively off weather, which at the moment does gravitate towards more normal

temps in the 11-15 day period, but this is hardly something to provide a material catalyst for a shift in sentiment. The immediate term does not present a good platform for a return of the bulls. We continue to see the spring as the most vulnerable to downside price pressure given the expected boisterous March storage exit level, but the curve continues to have those contracts trading at a premium to front-month.

“We continue to hold a constructive price expectation starting in 2H2016 [$3.05-3.45], with 2017 exposed to significant upside price risk the longer oil and gas prices stay at current levels.”

In overnight Globex trading March crude oil gained 54 cents to $30.42/bbl and March RBOB gasoline lost 2 cents to $0.9844/gal.