December natural gas is expected to open 6 cents lower Wednesday morning at $4.19 as traders mull the possibility of a jet stream moderation to the current pattern of intense cold. Overnight oil markets weakened.

Weather forecasters expect the bone-chilling cold now pummeling the Midwest and Midcontinent to reach the energy markets of the Atlantic Seaboard, but not without hinting that the cold could be tempered by the jet stream. “The cold front will finally move into the Southeast and eastern US coastline Thursday after one more day of highs reaching the 60s and 70s,” said Natgasweather.com in a morning report.

“There will be another very strong Canadian blast to follow early next week with sub – freezing temperatures again covering many high population regions including bringing hard freezes deep into the Southeast. This will lead to another round of much stronger than normal heating demand. However, we still see potential for a strong Pacific jet stream to crash into the western US late next week with milder weather systems, thereby forcing the bitter cold air to retreat into southern Canada. This may only be temporary though as weather systems will again have opportunity to tap into the reservoir of very cold air shortly after.”

Market technicians see the bullish case requiring some more effort. “[We] still think there is room for sideways to lower prices near term after last week’s short squeeze,” said Brian LaRose of United ICAP. “However, that is not a necessity. To restore the up trend all the bulls need to do is clear the $4.544 high. Any continued retreat will have us looking to the ratio retracements of the $3.541 to $4.544 advance for support. [We] see ideal support being between $3.928 (.618) and $3.760 (.7862).

Tim Evans of Citi Futures Perspective sees the market in “a corrective or consolidation phase, encouraged by a temperature forecast that looks less intense than a day ago.” He noted that the December contract recovered 12 cents off session lows to finish essentially flat on the day.

“With the more moderate temperature outlook, we still see a similar pattern as a day ago, but with somewhat less heating demand and somewhat reduced storage withdrawals,” he said in closing comments to clients.

“At the moment, this cold snap is looking more like a one-off event than a sustained period of strong demand. However we think it is worth bearing in mind that the temperature forecast could well shift again, and that some further cycles of cold are still likely in a heating season that has really only just gotten underway.”

In overnight Globex trading December crude oil fell 71 cents to $77.23/bbl and December RBOB fell fractionally to $2.0827/gallon.