May natural gas is set to open 4 cents higher Wednesday morning at $3.19 as traders discount not only mild weather patterns but also expected plump storage figures. Overnight oil markets weakened.
"Springtime variability looks to continue to limit temperature extremes over the next couple of weeks," said Matt Rogers, president of Commodity Weather Group, in a morning report to clients. "In the near term we are still watching some modest, transient warmth course through the Midwest and East to end the week with some 80s from the Ohio Valley to the Mid-Atlantic.
"After a pullback over the weekend and early next week, there is another burst of warmth across these areas late next week and into the early 11-15. We are a little warmer with that next round of warmth (around 80 across the southern Midwest to the Mid-Atlantic), but risks still lean a few degrees higher."
Analysts’ calculations show a somewhat greater than average storage build for Thursday's inventory report. "The early consensus for Thursday's DOE storage report is running at 45-46 Bcf in net injections from what we've seen, a seasonal step up from the prior week's 10 Bcf gain, and more than the 35 Bcf five-year average refill for the week ended April 14," said Tim Evans of Citi Futures Perspective in closing comments Tuesday.
This is not exactly good news for the bulls. "While only a modest excess over the five-year average rate, we also note that the storage data fails to confirm the implied bullish view of money managers who held the largest net long position since May 2014 in the CFTC Commitments of Traders report from April 11," he said.
In overnight Globex trading May crude oil eased 2 cents to $52.39/bbl and May RBOB gasoline dropped a penny to $1.6996/gal.