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Supportive Weather Non-Existent; May Called 6 Cents Lower

May natural gas is expected to open 6 cents lower Monday morning at $3.17 as weather models were unable to muster any significant changes and the likelihood of tapping into cold, Canadian air appeared remote. Overnight oil markets slumped.

"No major changes were made to the forecast in this period when compared to the Sunday Report, but cooler changes are noted in the Eastern Half relative to expectations seen late last week," said MDA Weather Services in its morning six- to 10-day outlook. "Near-normal readings are now forecast from the Plains points east, with any belows pressing in being brief and storm based. A cooler air mass is seen in Canada, but this air mass may be a struggle to tap into given the still active flow out of the Pacific.

"With that said, raw model consensus is cooler across the Eastern Half and poses a risk lean in that direction. The Southwest favors aboves throughout the period. Some models over the weekend suggested interaction between low pressure and a cooler Canadian air mass, a risk in the cooler direction of forecast. The Interior West could be cooler late."

Bulls need to be patient for forecast weather to develop. "It's next weekend when a weather system will track over the southern and eastern U.S., to then be followed by a colder one across the north-central and northeastern U.S., and where we see the addition of several HDDs," said Natgasweather.com in a Sunday evening report to clients. "Mild high pressure is favored to follow across the southern and eastern U.S. April 28-31 with light demand returning, although it’s worth noting the EC [European] weather model is a little cooler on the late April pattern than the warmer GFS [Global Forecast System]."

Tom Saal, vice president at FCStone Latin America LLC, in his work with Market Profile expects the market to test last week’s value area at $3.221 to $3.149. That value area, he said, encompasses a large portion of Minus Development pricing from last week. "Minus Development is a pricing area 'to be filled in' to complete a normal (bell curve) distribution," he said in a morning note to clients.

In overnight Globex trading May crude oil dropped 10 cents to $53.08/bbl and May RBOB gasoline fell fractionally to $1.7380/gal.

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