June natural gas is expected to open 7 cents lower Tuesday morning at $2.82 as traders digest a round of more moderate weather forecasts and anticipate a hefty build in inventories. Overnight oil markets fell.

Weather forecasts near term are looking for some moderation in eastern heat and a cooler Midwest as well as a realignment from current patterns. Commodity Weather Group in its Tuesday morning forecast said, “National demand estimates are estimated to be a bit lower than Friday’s estimations, thanks to a combination of weaker heat on the East Coast this week as well as a stronger cooler interlude for the Midwest, Texas and even East early next week ahead of another round of heat. That second round of heat still looks like it will deliver some much above normal temperatures to the eastern third of the U.S. early in the 11-15 day, but it looks more short-lived than fixed toward any long-term pattern stability.

“In fact, over the past one to two days, the models have really converged on a new pattern look that shows stronger West heat ridging, including California that gets going stronger in the four-10 day range and carries into the 11-15 day. This new setup could open the door for a cooler-looking June pattern in the East. Meanwhile, the main cool (and very wet) spot continues to be the South Central U.S., especially Texas, for the next two weeks,” said Matt Rogers, president of the firm.

A combination of near-term production increases and a hefty build in Thursday’s inventory report are likely to keep the market under pressure, according to analysts. “We viewed [Friday’s] price action as bearish despite the fact that price declines were modest at around 1.5%,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients on Friday. “The chart breakdown to lowest levels since the middle of last week ahead of a weekend that could bring some additional warming in the short-term temperature views suggested an unusually heavy trading environment.

“Although the large non-commercial entities remain heavily positioned on the short side, we will look for today’s COT guidance to suggest more latitude for more speculative short entry given this week’s technical deterioration. Finally, we saw some additional bearish overflow from the oil complex in today’s trade. In sum, today’s price action reinforced our bearish stance as we anticipate additional price slippage toward the $2.50 area. Unless the temperature views that will soon be shifting well into the second week of June shows some broad based above normal trends, market focus will be on a likely triple digit injection per next weeks EIA [as well as] some upcoming production gains following this month’s maintenance in response to a recent leveling in the gas rig count.”

In overnight Globex trading July crude oil retreated 65 cents to $59.07/bbl and July RBOB gasoline fell a penny $2.0307/gal.