April natural gas is expected to open 2 cents lower Wednesday morning at $2.71 as traders assess a non-directional technical environment and active near-term weather. Overnight oil markets were mixed.
Brian LaRose, a technical analyst with United ICAP, sees no change in a market showing no trend. "Only one way to salvage the case for a larger degree bottom developing here, bulls need to stage a reversal in front of the $2.567 low and shift the technicals in their favor. [That's] a tall order, to say the least. Fail to carve out a bottom in front of the $2.567 low and our minimum implied downside target becomes $2.257 as '1'='5' [wave pattern]. Clearly, it is bottom or else," he said in closing comments Tuesday.
Rather than cold weather in the forecasts, meteorologists see load-killing rain in the near term. "Wet weather is expected on both the East and West coasts on Wednesday. A low-pressure system that brought heavy rainfall to the Eastern Valleys will combine with a low-pressure system moving through eastern Canada as it advances northeastward. As these systems move eastward and offshore, a cold front trailing behind this system will allow for moderate to heavy rainfall to persist from southern New England through the Gulf states. Rainfall totals will range from 0.5 to 1.0 inches for most areas, with some isolated areas seeing over an inch of rain," said forecaster Wunderground.com in a Wednesday morning report.
"Meanwhile out West, a strong low-pressure system spinning in the North Pacific Ocean will continue advancing northeastward toward British Columbia. This system will create a cold front that stretches down the West Coast and moves onshore throughout the day. Expect rain showers to develop from British Columbia through central California, with heaviest precipitation expected over the Washington Cascades. Snow levels will remain above the Cascade Pass level. As this front slowly advances eastward, expect the Sierras to see some snow. Snowfall levels may range from 6,000 to 7,000 feet Wednesday night, but significant snowfall accumulation is not expected due to limited moisture associated with this system."
In overnight Globex trading, April crude oil rose 26 cents to $48.55/bbl and April RBOB gasoline fell fractionally to $1.8059/gal.