February natural gas is set to open 6 cents higher Tuesday morning at $2.94 as near-term weather outlooks turn cooler. Overnight oil markets were narrowly mixed.
Weather models shifted to chillier overnight. "Both the American and European ensembles saw more colder vs. warmer changes overnight thanks to the introduction of another Midcontinent cold push late in the 6-10 day range that delays the warming trends in the 11-15 day," said Commodity Weather Group in its morning report. "This is an interesting shift because the Canadian ensembles already had this concept yesterday. There were also some colder changes in the Northeast at times thanks to an impressive snow pack interacting with pulses of Arctic air.
"The 11-15 day is still warmer overall than the six-10 day, but collectively not as warm as seen yesterday with still considerable cold risks offered in the front half of the period by the American and to some extent Canadian ensembles. The upper level pattern becomes extremely complicated by mid to late 11-15 day with the European ensembles split almost 50-50 between some lingering colder weather and a warmer pattern returning inside February's second week," said Matt Rogers, president of the firm.
Analysts saw Monday's retreat as a function of weather developments, but otherwise see trendless trading for the next couple of days. "[Monday's] big 3 ½% selloff appeared related to some bearish adjustments in the short term temperature forecasts during the past weekend," said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients. "However, we are still not seeing any broad based warming trends capable of sustaining today's losses.
In overnight Globex trading March crude oil rose 18 cents to $45.33/bbl and March RBOB gasoline fell fractionally to $1.3467/gallon.