June natural gas is set to open 5 cents higher Monday morning at $2.11 as forecasters are calling for the season's first major warm event and traders suggest implementing long hedges. Overnight oil markets fell.

Risk managers are awaiting weather developments before implementing any strategies. "Natural gas closed lower across the board. After opening lower on the week, the front month broke to the $2.00 level before it found any support," said Mike DeVooght, president of DEVO Capital.

"Natural gas will most likely be in a holding pattern until we get deeper into the summer cooling season. If we get warmer than normal temperatures early in the season, we could move back into the mid-$2 range. On a trading basis, we will continue to stand aside and await further developments."

DeVooght said that should the opportunity arise, producers and physical market longs should sell the June-October strip at $2.70.

Those weather developments might not be far off. Forecasters see the arrival of the season's first major cooling events in eastern population centers. "The big change over the weekend was in the warmer direction as the first significant event of May hits the Midwest and East this week and then continues into the holiday weekend as well as the first days of June," said Commodity Weather Group in its Monday morning outlook.

"While the heat next week is not expected to be as strong as the [balance of the week] performance, there are still warmer risks in there with widespread 80s seen for the southern Midwest to East Coast. As of right now, our peak forecast temperature for Washington, DC, is this Friday at 89 F with moderate humidity (dew points in the 60s).

"It would be the warmest reading so far this year. This warm event continues to mostly miss the South, but we are a bit warmer at times for the Tennessee Valley and Southeast. The West experiences mostly cooler changes compared to Friday's outlook, especially Southern California and Southwest. The end of the 11-15 day starts to show some eastern cooling trends, but confidence is very low," said Matt Rogers, president of the firm.

According to Tom Saal, vice president at FCStone Latin America LLC in Miami, the "Cal '17 and Cal '18 [strips] are now oversold. "[T]he time is now to scale into long hedges. Strategies include fixed-price, long call option, collars and accumulator (below market price)," he said in a Monday morning note to clients.

In overnight Globex trading July crude oil fell 84 cents to $47.57/bbl and July RBOB gasoline fell a penny to $1.6304/gal.