January natural gas is expected to open 17 cents lower Monday morning at $3.58 as traders are quick to exit long positions following weekend weather data showing expected cold well above normal but slightly less than Friday. Overnight oil markets soared.

"[Monday's] six-10 day forecast has a mix of big day-to-day changes on a regional basis compared to Friday's forecast," said WSI Corp. in its Monday morning report to clients. "There are some key warmer changes over the East Coast early in the period and then over the Rockies, Midcontinent and Canada late. As a result, CONUS GWHDDs are down 1.5 to 166.5 for the period. These are 19.5 above average.

“A small change with the timing and track of a storm and its associated cold front could easily swing the forecast in either direction during the start of the period. In general, there are minor warmer risks over the East ahead of the front, but also some colder risk behind the system.”

Analysts have $4 in sight.

"Storage has erased its year-over-year surplus, and we think markets are tightening quickly amid declining U.S. output and rising demand (LNG, Mexico, power)," said Jonathan Wolff, an analyst with Jefferies LLC. "With a lack of sufficient reinvestment, the market has turned its attention to the potential for price spikes. We remain natural gas bulls, seeing further output declines in 2017 amid northeast gas evacuation limitations and strengthening demand drivers. Our price forecast remains $3.50 for 2017 and $4 long term."

The National Weather Service (NWS) forecasts increased heating load for major energy markets for the week ending Dec. 17. NWS calculates that New England should see 262 heating degree days  (HDD), or 21 more than normal, and the Mid-Atlantic is looking down the barrel of 248 HDD, or 25 more than its norm. The greater Midwest from Ohio to Wisconsin will have 301 HDD, or 48 more than its normal seasonal tally.

The Desk' Early View Storage Survey for the week ending Dec. 9 showed a stout drawdown and perhaps the first of several triple-digit draws to come. The survey of 10 traders and analysts showed an average 127 Bcf withdrawal with a range of -113 Bcf to -135 Bcf. Last year 46 Bcf was pulled, and the five-year pace stands at 79 Bcf.

In overnight Globex trading January crude oil rose $2.49 to $53.99/bbl and January RBOB gasoline added 6 cents to $1.5658/gal.