March natural gas is expected to open 5 cents higher Wednesday morning at $2.95 as traders note little change in more deferred temperature outlooks. Overnight oil markets eased.

Although near-term temperature outlooks continue to moderate, longer-dated forecasts were mostly unchanged. In its morning 11- to 15-day outlook MDA Weather Services said, “Forecast changes were generally minor here as the broad warm anomalies seen in the preceding periods start to wane. Despite this, this period should continue to feature above normal coverage across the South, around the Great Lakes and in the East, while below normal temperatures are focused in the West.

“The breakdown of the warm-dominated pattern leading into this period is supported by the MJO [Madden Julian Oscillation] tracking across the Indian Ocean, with the biggest risk in this regard relating to the timing in which variability increases in response to the signal. Overall confidence is steady at moderate levels.”

Tuesday’s forecast change has prompted a reassessment of near-term supply-demand balances and motivated one trader to take a short position.

“Tuesday’s weather update reduced the likely rate of storage withdrawals, particularly for the week ending Feb. 24,” said Tim Evans of Citi Futures Perspective in a note to clients. Evans calculates a pull of 124 Bcf for Thursday’s storage report and said that by March 3 the year-on-five-year surplus jumps back up to 244 Bcf “confirming that the market is becoming better supplied on a seasonally adjusted basis even as the time remaining in the storage withdrawal season grows shorter.”

That building supply in the face of waning time left on the withdrawal season has prompted Evans to take a short futures position. Evans is currently short the March contract from $3.16 with a protective buy stop lowered to $3.11 to reduce exposure on the trade. His objective is $2.85.

Others aren’t buying into the lower price scenario. “I think we have come down too far, too fast,” said Alan Harry, principal with Harry’s RE Trust. “I think there is still some cold winter, not much, but some. The biggest thing I am looking at is the supply that is coming into the market is not as high as it should have been. Because of that it says to me that there is still going to be pressure on the supply-demand part of natural gas, and I see us heading back up come June.”

Harry is a scale-in buyer at current levels.

In overnight Globex trading March crude oil fell 34 cents to $52.86/bbl and March RBOB gasoline eased fractionally to $1.5455/gal.