April natural gas is expected to open 2 cents higher Tuesday morning at $1.71 as traders factor in a counter-intuitive market response to continued forecasts of moderating temperatures. Overnight oil markets rose.

Longer-duration overnight weather forecasts moderated somewhat in their pace of ongoing temperature moderation. WSI Corp. in its Tuesday morning report said, “[Tuesday’s] 11-15 day period forecast still depicts widespread above average temperatures, except for portions of the interior West. Today’s forecast is a bit warmer across the East but colder over the Rockies and central U.S. CONUS GWHDDs are down 2.5 and are now forecast to be 68.4 for the period. This is 30 HDDs below average. Forecast confidence is only average at the very best today. Medium-range models are in reasonably good agreement, with a pattern change and shift to cooler conditions.

“However, there is inherent uncertainty during period of change and spread within the models with how this transition unfolds that limit confidence levels. The forecast has risks in either direction, but the general risk and trend is to the cooler side over the central and eastern U.S. The risk is greatest over the north-central U.S.”

Analysts suggest that the recent market downtrend is likely to resume with prices focusing on $1.50. “We are reluctant to read too much into the show of support that has developed thus far this week since we have not seen any significant shift in the fundamental inputs capable of sustaining much of a price advance,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients.

“Updates to the short-term temperature views that now stretch to about March 22nd continue to favor much above normal temperature trends that still extend broadly across the eastern half of the U.S. This dramatic downsizing in HDDs will likely contribute to limited change in storage beyond this Thursday’s release. Although an expansion in the supply surplus against last year of as much as 125 Bcf has likely been baked in, we feel that an end of season supply as large as 2.5 Tcf is a possibility if temperatures prove warmer than currently expected within the six-14 day views.

“We had been anticipating a season-ending supply of around 2.3 Tcf earlier this year, and this incremental stock of 0.2 Tcf or some 9% would appear to associate with lower price levels. We see a down move to around $1.50 as achievable once the current oversold technical condition is resolved and the market is forced to refocus on a record supply that could eventually force storage overcrowding next fall unless the summer proves exceptionally hot.”

In overnight Globex trading April crude oil rose 11 cents to $38.01/bbl and April RBOB gasoline added a penny to $1.4073/gal.