November natural gas is set to open 3 cents lower Wednesday morning at $3.68 as weather forecasts remain stubbornly locked in moderate mode and the technical environment continues to deteriorate. Overnight oil markets rose.

Analysts suggest that last week’s plump reported storage build might prompt somewhat inflated estimates this week and lead to a number coming in actually lower than expectations.

“For this week’s EIA [Energy Information Administration] storage report, early analyst guidance suggests a similar build to last week’s release of 94 to 98 Bcf for the week ending Oct. 17th,” said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas. “The EIA announced an 86 Bcf injection for the same week last year while the five-year average is a 70 Bcf build. We expect that last week’s outsized stock report might inflate more than a few of the analyst projections, opening the door to a lower-than-expected release this week. Nevertheless, even a lighter build that approaches 100 Bcf could hardly be categorized as constructive for prices.”

She added that weather forecasts continue to look less constructive. “[Tuesday’s] weather forecast featured additional demand losses, especially in key heating markets in the Midwest and Northeast. And while normal progression might enable the cooler pattern developing in the U.S. late next week to move eastward, conditions remain largely unfavorable for lingering cold weather at the start of the heating season. This weather outlook is a dramatic departure from the year-ago pattern when heating demand began to build this week, significantly tapering the build in inventories. The extended outlook for much looser supply-demand balances implies that the industry will likely convert the year-on-year storage deficit into a surplus before year-end. Indeed, based on our analysis, we see the possibility of another 100 Bcf reduction in the stock shortfall by month-end.”

Weather forecasts changed little overnight. “Details shifted around a bit on next week’s weather with cold front timing differences, but the general warm-prevailing view continues,” said Matt Rogers, president of Commodity Weather Group on Wednesday morning. “Progression of slightly cooler weather into the Midwest and East by mid to late next week helps to ease the map anomalies, so we lose coverage of the moderate above normal today on much of the map. The 11-15 day is evolving into quite the complicated pattern. Big high-pressure ridging building around Alaska is helping to shift cooler to colder surface high pressure south toward the U.S., but the models are debating where it goes and how strong.”

Tom Saal, vice president at INTL FC Stone, in his work with Market Profile expects the market to test Tuesday’s value area at $3.676 to 3.650. It “could test” $3.771 to 3.743 as well. Saal pinpoints this week’s initial balance at $3.714 to $3.641. Breakouts above the high end of the initial balance should be bought, and breakdowns below the low end of the initial balance should be sold, according to Market Profile methodology.

In overnight Globex trading, December crude oil added 35 cents to $82.84/bbl and December RBOB gasoline rose a penny to $2.1648/gal.