June natural gas is expected to open a penny higher Wednesday morning at $4.56 as traders reassess recent weather forecasts and balance those against expectations of near-term storage injections that are likely to soften the market. Overnight oil markets rose.

Analysts see Tuesday’s 8-cent rise as less than what had been depicted. “Prompt-month gas futures climbed stoutly yesterday based on general hot weather hype from various news media sources regarding June demand potential,” said Alan Lammey of WeatherBELL Analytics in a morning report to clients. “In fact, June gained about 2% on the day amid the weather rhetoric. However, the fact is temperatures during month of June don’t appear to be as hot as they’re being portrayed to be by the media outlets — and as absurd as it sounds, the hype may simply be the result of a slow news week for the U.S. natural gas market. With that said, it will be warm in areas of the U.S., but probably not the blowtorch conditions that are being depicted.

“Once the market gets a better ‘real understanding’ that June doesn’t appear to be that much of a big natural gas demand standout — and then couples that realization with record supply leading to stout weekly storage numbers — it may lead to some further price weakness in the days and weeks ahead,” said Lammey. “The next issue to watch is the potential for early tropical season activity to materialize. But keep in mind that typically early in the hurricane season, most tropical action results in ‘demand reduction’ events via cooling rains and power outages rather than interruption of supply.”

Hurricanes? What Hurricanes? The 2014 Atlantic hurricane season is expected to produce fewer than the average number of tropical storms and hurricanes, according to forecasters at AccuWeather.com, who said tropical development could be altered by the onset of an El Nino even in late summer of fall (see Daily GPI, May 15). The forecasters said they expect 10 named storms, including five hurricanes, two of them major (Category 3 or higher), to form in the Atlantic Basin after the hurricane season begins on June 1.

Forecasters at Colorado State University (CSU) recently said in their first tropical forecast of the year that they too expect an El Nino event — the warming of water temperatures in the central and equatorial Pacific Ocean — to limit the number of hurricanes that form in the Atlantic Basin (see Daily GPI, April 11).

Even with a sub-par hurricane outlook, others aren’t buying a bearish scenario. “Even with our first triple-digit storage build on the horizon, [natural gas] has strongly recovered from last week’s low of $4.289,” said Drew Wozniak, vice president at United ICAP in a Tuesday morning note to clients. “My thesis has been that storage in the shoulder months has no chance of recovering to even the five-year minimum level before the heat sets in…not by a long shot, and we are likely to enter the withdrawal season at the end of October at a very low level. How can this be with all the shale gas production? It is simply not enough.”

Hyped or not, forecasters are calling for near-term modest warmth. “No major forecast changes today [Wednesday], but the outlook trends a bit warmer again for the Midwest into the East next week,” said Commodity Weather Group in its morning outlook. “The peak day for Chicago though is expected to be 85 F on Monday’s Memorial Day holiday, while the East Coast should see ranges from the upper 70s in Boston to the lower to middle 80s in the Middle Atlantic during the abbreviated following workweek.

“Humidity is not expected to be exceptional with lows in the lower 60s mostly. The South continues to see seasonal to only slightly above-normal temperatures, while Western heat is strongest in the interior and still more directed toward northern versus southern California. The 11-15 day looks more variable and the model consensus is cracking with the American cooler and Canadian warmer than our outlook today (no major heat expected),” said Matt Rogers, president of the firm.

In overnight Globex trading July crude oil added 73 cents to $103.06/bbl and July RBOB gasoline gained a half cent to $2.9565/gal.