April natural gas is set to open 3 cents higher Tuesday morning at $1.86 as forecasts call for a greater occurrence of below-average temperatures, and analysts see a market in a consolidation phase. Overnight oil markets retreated.

Forecasters called for broadening cooler temperatures over key energy markets. WSI Corp. in its Tuesday morning report said “The 11-15 day period forecast depicts the expansion of below average cold over the eastern two thirds of the nation, focused over the Mid West. Above- to much-above-average temperatures are likely over the West. [Tuesday’s] forecast is warmer or slower to bring the cold into the East, but is colder over the interior West and north-central U.S. CONUS GWHDDs are down 3.8 for days 11-14 and are forecast to be 74.1 for the period.

“Forecast confidence is a little better than average as medium range models are in good agreement with the development of a highly amplified, -EPO [Eastern Pacific Oscillation] pattern that favors the expansion of late season cold. Despite the upward revision, the risk is to the colder side over the eastern two thirds of the nation.

Analysts see a tough grind lower ahead for the bears. “It appears that this market is now morphing into a consolidation phase with the official arrival of the shoulder period when non-weather related factors will be relied upon to force any significant price movement,” said Jim Ritterbusch of Ritterbusch and Associates in a morning report to clients. “With stocks at or near a record level with the huge surplus expected to expand appreciably again on Thursday, the two week short covering advance has been completed and we see some additional weakening going forward. But, with values at historically low levels, we will re-emphasize that the process of squeezing the final 30 cents out of a two-year $4-½ bear move will prove arduous and that selling should be selective.

“While price advances to our preferred sell zone above the $2 mark in May futures appear out of reach as far as this week is concerned, quantity type traders should maintain a core short holding in anticipation of fresh lows. As is the case in the petroleum, some production slippage is being seen in response to the dramatic plunge in rig counts. However, EG demand improvement off of coal to gas substitution continues to be a slow mover and has been unable to offer much price support.

“Although we still see strong possibility of fresh lows and a potential decline in May futures to as low as the $1.60 area, we feel that such a development will need to be seen by month’s end if it is to materialize. The primary argument for lower pricing continues to be a record level of storage that will likely be approaching 2-½ Tcf with Thursday’s release. But we are also forced to acknowledge that this supply side factor has been virtually discounted.”

In overnight Globex trading, May crude oil fell 35 cents to $41.17/bbl. and May RBOB gasoline fell fractionally to $1.4898/gal.