April natural gas is set to open 4 cents higher Wednesday morning at $1.75 as weather models show less warming. Overnight oil markets rose.
Weather forecasters see a temporary lessening in the ongoing trend of milder temperatures. "While powerful warming continues to dominate the one- to five- and six-10 day ranges for much of the Midwest, East and South, we are seeing building support for what looks to be a brief cooler period that impacts the middle third of the U.S. the most starting late in the six-10 day and going into the front half of the 11-15 day especially," said forecaster Commodity Weather Group in a morning report.
"This is due to an Alaska high pressure ridge spike and a brief reduction in the Pacific undercutting flow signal as shown on the various model guidance this morning, including the upgraded European ensemble. It seems like it really has trouble getting to the East Coast though and we keep that area mostly warmer than normal again," said Matt Rogers, president of the firm.
Market technicians see a somewhat supportive outlook, but prices have to rally considerably to change the current downtrend. "Only one way for the bulls to break the back of this down trend, clear key resistance and swing the technicals to a bullish bias," said Brian LaRose, a market analyst with United-ICAP. "Despite the recent dip to fresh lows the technicals continue to look constructive. However, that means nothing without action on the price front. To suggest a bottom is developing bulls would first need to push natgas up and over the $1.892-1.963 zone.
In overnight Globex trading April crude oil rose 52 cents to $37.02/bbl and April RBOB gasoline added 3 cents to $1.4171/gal.