May natural gas is set to open unchanged Friday morning at $3.16 as traders factor in highly variable weather and see technical support levels intact for the moment. Overnight oil markets were narrowly mixed.

Analysts see risk to the downside. “[W]e still feel that a breakout of the past week’s trading range is more apt to develop on the downside rather than upside given ongoing expansion in the supply surplus that could potentially stretch toward 300 Bcf with next week’s EIA release,” said Jim Ritterbusch of Ritterbusch and Associates in a Friday morning note to clients.

“While some recent additional downsizing in U.S. production and unexpectedly strong export activity is acting to deter aggressive selling interest, we still expect output to gradually increase during the late spring/early summer period in helping to accelerate seasonal supply injections.

“This will likely demand some strong CDD accumulation later next month if more price strength is to develop. Otherwise, we look for nearby futures to erode in erratic fashion down toward the $3.05 area where we will expect longer term support to set the stage for a summer price advance.”

Gas buyers for power generation across the PJM footprint this weekend look to have their hands full with highly variable weather conditions and not much in the way of wind and renewable generation to work with. “Changeable and variable conditions are expected as a frontal system and its associated cold front will continue to slide across the power pool [Friday] with a chance for additional showers and thunderstorms,” said WSI Corp. in a Friday morning report to clients.

“There will be a wide range and changeable temperatures. Much of the Mid Atlantic, except for northern New Jersey will be unseasonably warm and even a touch on the humid side, with readings in the 70s to mid 80s, but western PJM will cool into the upper 50s, 60s to near 70. A north-northeast wind will boost wind generation during the next two days with output 2-3 GW, and wind gen may increase early next week.”

In overnight Globex trading June crude oil fell a penny to $50.70/bbl and June RBOB gasoline rose fractionally to $1.6747/gal.