April natural gas is expected to open 3 cents higher Wednesday morning at $2.80 as traders factor in an upcoming cold spurt and take note of what might be a nascent technical recovery. Overnight oil markets were mixed.

According to forecasters, more seasonal temperatures are on the horizon. “Demand will be volatile to kick off the new month. [Wednesday] should be the final day for eastern markets to enjoy the substantially warmer-than-normal temps of the past few days,” said industry consultant Genscape in a morning report to clients.

“Starting tomorrow, the warm front’s departure will push HDDs back toward seasonal norms, with the possibility of colder-than-normal temps by Friday. Following that, though, next week will once again see a rapid reversion to warmer-than-normal temps into the middle of March. Western markets from the Pacific Northwest to Desert Southwest will experience seasonally normal temps.

“Accordingly, we have California/Nevada-region demand falling rather sharply from today’s 7.2 Bcf/d to a low of 5.5 Bcf/d by Monday…This spring is setting up to be a potentially record-breaking year for hydro generation with snowpack levels at record highs and generation already occurring from heavy rains. Rockies, Texas, Midcon and Midwest will start off the month at normal temps, then gradually warm into next”

“The natural gas futures staged an upward technical correction in price on Tuesday after the nearby April futures survived a near retest of the $2.641 low in the April contract reached last week,” said Tim Evans of Citi Futures Perspective in closing comments to clients.

That technical correction may be the first step on the road higher. Other technicians versed in Elliott Wave and retracement see the market squarely in the bull’s court. The bearish case, said United ICAP’s Brian Larose, is that “a five-wave decline from the $3.494 high is still in progress. A wave ”four’ correction is currently unfolding.

“Bullish case, an ABC pattern down from the $3.994 high has completed. A bottom is forming. Peg $2.825-2.856-2.869-2.875 as ideal resistance. Peg $2.931-2.947 as the must hold to keep the down trend alive. Bulls know what they need to do. Will be watching to see if they can get it done.”

In overnight Globex trading April crude oil gained 16 cents to $54.17/bbl and April RBOB gasoline lost a penny to $1.7160/gal.