May natural gas is set to open 5 cents higher Tuesday morning at $1.96 as traders largely discount a weather environment that is expected to offer more for market bears than bulls. Overnight oil markets rose.

Analysts see unsupportive weather as largely factored into the market. “This market again spent the overnight session within a comparatively tight range as bearish weekend updates to the temperature views were quickly discounted via a 7-8 cent price drop at the start of the week,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning report to clients.

“From here, we see a couple more sessions of narrow range until Thursday’s EIA guidance spikes volatility again. We feel that a single-digit injection that would compare with last year’s 49 Bcf build and the five-year average hike of about 22 Bcf have largely been baked in. However, the market will remain sensitive to gradual production declines that are finally beginning to emanate from the dramatic plunge in rig counts during the past couple of years.

“While an argument can be made that production declines will be required during the next six months in order to preclude storage overcrowding, we still see declining output as a limiter on downside price possibilities going forward through the shoulder period.

“[W]e are having difficulty building a strong case for a price move of much more than 10-15 cents in either direction from current levels when looking out over the next couple of weeks. We still expect a potential weakening in the cash basis to force contango expansion, and we currently favor option strategies designed to capture premium in what could be a sideways trade that offers little price change a month or so down the road.”

Weather is essentially a non-event, and market bulls are going to look elsewhere for fundamental price drivers. According to the folks at in a noon Monday update, “Overall, the coming weather pattern looks quite bearish, highlighted by continued milder trends for the weather system tracking across the Great Lakes and Northeast during the middle of this week. Specifically, milder temperatures are currently returning to the eastern U.S., while modest cooling pushes into the central U.S. as a cool front stalls over the southern Plains and South with heavy showers.

“[W]e continue to view weather sentiment as increasingly bearish, aided by milder trends and the continued loss of HDDs for the middle of this week. The pattern will become quite bearish next week where we expect it to hold through much of the second half of April besides nuisance weather systems that occasionally graze the far northern U.S.”

Tom Saal, vice president at FCStone Latin America in Miami, in his work with Market Profile expects the market to test Monday’s value area at $1.922 to $1.914 and to “then test” $2.010 to $1.990.

In overnight Globex trading May crude oil added 34 cents to $40.70/bbl and May RBOB gasoline gained a half cent to $1.5112/gal.