April natural gas is set to open a penny lower Monday morning at $1.66 as overnight weather model runs continued the trend of moderating conditions. Overnight oil markets rose.
The trend of warming weather forecasts continued with overnight model runs. "The coverage and intensity of warmer-than-normal anomalies over the next two weeks continues to be impressive, and we report demand losses compared to our outlook from Friday yet again," said Commodity Weather Group in a Monday morning report.
"The biggest warmth versus normal continues to be over the Midwest, with the East Coast in second place and then the South following. The West is still more mixed, with storminess issues in especially the one-10 day range. The models trend drier for the 11-15 day, but there are signs of renewed split flow at the end that could bring rains/snows back to California once more," said Matt Rogers, president of the firm.
Market technicians are taking a close look at the difference between front month price action and the calendar strips.
"The question now, is the bullish sentiment we are seeing in the back of the curve about to spill over to the front?" said Brian Larose, an analyst with United ICAP. "To signal the bears have lost control, bulls would need to push natgas up and over $1.892-1.963. Have no reason to entertain bottoming action otherwise."
Tom Saal, vice president at FCStone Latin America LLC in his work with Market Profile said, "Falling weekly profiles reveal solid selling by professional speculators. Eventually, expect short-covering by these traders to profit from these shorts trades."
Saal is looking for the market to test weekly value areas at $1.734 to $1.660, then $1.893 to $1.781. "Eventually" he expects a test of $1.999 to $1.947 and $2.223 to $2.084.
In overnight Globex trading April crude oil roe 43 cents to $36.35/bbl and April RBOB gasoline added a penny to $1.3456/gal.