January natural gas is set to open 3 cents higher Wednesday morning at $2.10 as traders combine oversold market conditions with a dose of cooler temperatures expected by the end of the week. Overnight oil markets rose.

Forecasters are not optimistic that near-term weather will have much of an impact on demand. The arrival of meaningful cold depends on the ability of weather systems to tap into cold Canadian air and drive it south into major U.S. markets. Forecasters can’t really say with any certainty that is in the cards.

Natgasweather.com said to not expect much for the next five days, but “stronger pushes of colder northern latitude air spreads across the country from west to east beginning Friday. Specifically, much of the country will remain +15-25 degrees F warmer than normal besides the West Coast. This will be followed by increasing natgas demand late this weekend as strong Pacific weather systems with rain and snow sweep through the interior West and then gradually into the central U.S. by early next week, including deep into Texas. Cooling will gradually reach the East as next week progresses to bring stronger demand.

“How much each weather system tracking across the northern U.S. taps remains uncertain and is the primary cause of major weather model struggles. There are still plenty of ways the pattern plays out quite cold as we approach the official start of winter (Dec. 22nd), although the weather data isn’t convincing as it needs to be with the weather models continuing to produce wildly varying solutions from one run to the next, but with an overall theme stronger natgas demand is coming.”

The failure of any significant cold to materialize has analysts recalculating supplies. Tim Evans of Citi Futures Perspective along with much of the industry sees a pull of about 65 Bcf from storage for the week ended Dec. 4 but the surplus going forward is expected to build. “[T]he year on five-year-average surplus that was 247 Bcf as of Nov. 27 would expand to 401 Bcf as of Dec. 18 before declining to 376 Bcf as of Dec. 25. This overall increase in the storage surplus confirms the market is becoming better supplied on a seasonally adjusted level. A rising surplus can be thought of as downward fundamental pressure on prices, or at least a headwind for any price recovery,” he said in closing comments to clients Tuesday.

Price recovery? Some say that isn’t even close to becoming a reality any time soon. “They [bear markets] don’t end when the losers outnumber the winners and they don’t end when the point of maximum assumed pain is reached,” Walter Zimmermann of United Energy told NGI Tuesday. “They end when chart patterns are completed to the downside, and that always seems to exceed by decisive margins rational expectations of what is possible on the downside.

“That is what crude oil is going through right now, and gasoil, and diesel, and natural gas through guilt by association. I think natural gas left to its own devices would just be sitting here not doing much of anything.”

In overnight Globex trading January crude oil gained 27 cents to $37.78/bbl and January RBOB gasoline rose a half cent to $1.2088/gal.