June natural gas was set to open Tuesday about 2.7 cents higher at around $2.790/MMBtu, as forecasts overnight showed an increase in potential cooling demand for May.

“Overnight weather model guidance added a solid chunk of cooling demand but lost even more heating demand, as seasonally heating demand matters more through the first half of May,” Bespoke Weather Services said. “The result was a tick lower” in gas-weighted degree days overnight, although the natural gas market “appears more concerned about the potential for sustained above average cooling demand into the second half of May and beyond.

“The general theme has been for long-range ridging building primarily across the Midwest, where we expect heat to be strongest into mid-month,” Bespoke said. “Across the South and Southeast a slightly warmer bias may remain in a pattern that looks to overall have very few cool risks into the second half of the month, and heat into the Northeast is increasingly likely too.”

Along with the prospect of cooling demand gains, Bespoke pointed to storage deficits and the potential for “another fairly tight” inventory report from the Energy Information Administration (EIA) this week as supportive for prices, with elevated production and mild weather into mid-May presenting short-term bearish risks.

EBW Analytics Group CEO Andy Weissman said spot prices and storage injections generally have more sway over futures than day-to-day weather changes this time of year.

“Over the next few days, the potential for a below-normal injection (the first injection of the season) could give prices a temporary boost,” Weissman said. “Forecasts for a few days of summer-like weather could also push prices higher.

“By next week, though, the first of a string of 100-plus Bcf injections is likely and summer-like weather is expected to quickly fade,” he said. “As a result, any upward blip in prices should be brief, followed by further declines.”

On Monday the June contract settled at $2.763, rallying into the settle to finish down 0.8 cents after trading as low as $2.728 earlier in the session.

From a technical standpoint, “bulls needed to prevent June from slipping beneath $2.730-2.724-2.721,” according to ICAP Technical Analysis analyst Brian LaRose. “Natural gas bounced from a $2.728 low on Monday. Turning higher from support is just step one though. To have a shot at visiting $2.895-2.903-2.909-2.910-2.925 the bulls must now lift June above $2.823-2.846.

“Fail to punch through resistance and the bears will have another opportunity to challenge support.”

June crude oil was set to open about 73 cents lower at around $67.84/bbl, while June RBOB gasoline was trading about 2.5 cents lower at around $2.1063/gal.