November natural gas is set to open 2 cents lower Tuesday morning at $2.97 as traders view forecasts of pending cold as insufficient enough to materially alter supply demand balances. Overnight oil markets rose.

Traders see more upside than downside. "Although the short term one to two week temperature views have taken on a more bullish appearance with below normal patterns expected across the eastern half of the U.S., deviations from normal don't appear sufficient to crank up [heating degree days] appreciably," said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients.

"However, the recent establishment of a supply deficit against five year averages is increasing the market's sensitivity to changes in the weather forecasts and as a result, we still see more upside than downside potential in this market. Our expected 63 Bcf injection per Thursday's [Energy Information Administration] report would imply further expansion in the supply deficit to the 47 Bcf area. This will likely position the market for a strong and potentially sustained price advance on first sign of a severe cold spell that could develop within a consensus of outlooks next month."

Forecasters see a mix of weather systems ahead of a weekend cooling. "The latest mid-day data maintained the coming weekend weather system being the coldest in the current series, but was not quite as cold this round," said in a noon update Monday. "However, cool conditions are likely to linger over the north-central U.S. November 1-2 before gradually moderating, but until then, there will be two weather systems track across the country this week, with the first currently sweeping through the east-central U.S., although rather mild.

"A second cooler system will be quick to follow Tuesday-Thursday across the Midwest and East, although also not very cold as overnight lows only locally drop to near freezing. It's the third system this coming weekend into the Midwest and Plains that trended colder since late last week with a widespread hard freeze expected as temperatures drop into the teens and 20s, driving the strongest demand for heating so far this season."

In overnight Globex trading December crude oil rose 33 cents to $52.23/bbl and December RBOB gasoline added a penny to $1.6477/gal.