January natural gas is set to open 3 cents lower Tuesday morning at $1.88 as traders discount Monday’s rally and anticipate renewed selling pressure consistent with a weak weather outlook. Overnight oil markets were mixed.

Overnight weather model runs changed little, and above normal temperatures are seen into next year. “Powerful warmth continues to surge this week across the Midwest, East and South, with plenty of warm records to be broken in the coming days,” said Commodity Weather Group in its Tuesday morning report. “Our short-range changes were same-to-warmer for the Midwest and East, especially on low temperatures. Otherwise, the six-10 day is edging a bit colder for the West with the Midwest to New England also slightly cooler to colder versus yesterday’s update. Texas also shifts slightly cooler later next week.

“The 11-15 day is slightly faster, with cooling timing for this cooler to colder volatility around the New Year’s holiday and into the first days of January. In fact, the biggest model debate point this morning is how fast to try re-warming the pattern across the northern half of the U.S. The powerful El Nino background state supports the view that any colder volatility may only last about a week or so,” said Matt Rogers, president of the firm.

In spite of Monday’s double-digit romp higher, analysts don’t see a continuation and look for the bearish fundamentals to reassert themselves. “Although [Monday’s] strengthening in the curve sent off some bullish vibes, we are not seeing enough shift in the balances to suggest much additional upside price follow-through,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients Monday. “We look for February futures to encounter staunch resistance above the $2 mark as was evidenced today since the short-term weather views are still not indicating significant below-normal trends that would support $2 gas.

“Thursday’s EIA storage report may also force some renewed selling since our expected 25 Bcf withdrawal would be downsized by almost 100 Bcf from five-year average declines. And with this implied huge expansion in the supply surplus likely to stretch further again next week, it would appear that some renewed selling will be seen going forward. We are maintaining a bearish view as we have revised downside possibilities to about the $1.61 area. Shorts within the $2.00-2.06 zone would be suggested with stop protection advised above $2.21 on a close-only basis.”

In overnight Globex trading February crude oil rose 20 cents to $36.01/bbl and February RBOB gasoline shed 2 cents to $1.2002/gal.