December natural gas is set to open 4 cents higher Friday morning at $2.30 as traders anticipate a leaner storage injection in government figures yet still see a soft market landscape. Overnight oil markets fell.

Analysts see risk that the 10:30 a.m. EST release of storage figures by the Energy Information Administration (EIA) might come in lower than consensus estimates. The crucial element seems to be what kind of adjustments do you make to your model to account for lower gas prices that prompt fuel switching by power generators.

Last year, 47 Bcf was injected and the five-year average stands at 23 Bcf. The range of estimates is wide, with some as low as 44 Bcf (Genscape) and some as high as 78 Bcf (Citi). A survey of 24 traders and analysts by Reuters showed an average 51 Bcf with a range of 41 to 78 Bcf.

“We see some low-side risk this week, which would be the fourth week in a row that EIA came in lower than the market,” said John Sodergreen, editor of Energy Metro Desk. “It’s a rare case, but it has happened in the past during this period. We see Friday’s report distribution causing all sorts of price fireworks, unlike last year when EIA came within a couple Bcf of the market consensus (although higher). Two more weeks of builds, no question about it.”

From a fundamental standpoint the outlook is soft, with continued sub-par weather and sliding demand on the horizon. “[L]ittle change is being seen within the short-term temperature views that remain tilted in favor of mild trends,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Thursday. “These forecasts are beginning to stretch into the Thanksgiving holiday period when industrial demand will also be slipping due to four-day plant closures at some companies.”

Ritterbusch is somewhat on the high side of storage estimates at 57 Bcf. “We still expect a bearish rather than a bullish surprise since our projected injection is north of average industry ideas by about a 6 Bcf margin,” he said. “However, we are not expecting a major downward price response since large speculative entities appear fully allocated to the short side of this market and will likely be unwilling to establish bearish strategies even despite additional chart deterioration. Our stance remains unchanged as we will continue to await price advances of around 20 cents or so to re-establish shorts.”

In overnight Globex trading December crude oil fell 20 cents to $41.55/bbl and December RBOB gasoline fell fractionally to $1.2611/gal.