January natural gas was set to open about 5.4 cents higher at around $3.071 Tuesday as the market looks ahead to potential cold developing in the long-range forecast.

January, set to take over as the prompt month with the expiration of the December contract this week, managed to climb back above $3.00 Monday after settling 14.3 cents lower Friday at $2.916.

"Weather forecasts overnight yet again added more heating demand, primarily in the long-range, as short-term gas-weighted degree day (GWDD) losses were met by much more impressive long-range cold expectations," said Bespoke Weather Services in a morning update to clients. "Our GWDD forecasts continue to remain rather conservative due to the 11-15 day timeframe" for the forecast demand to occur and the “inherent uncertainty within the forecast."

Still, Bespoke said it expects "that through the week GWDD forecasts will continue to sizably increase as confidence increases with model agreement and the longevity of cold becomes apparent."

Meanwhile, the near-term forecast continues to show above-normal temperatures covering most of the country, though MDA Weather Services noted a colder change in the Midwest in its morning six- to 10-day outlook.

"This comes with the interaction between lows tracking through the Southwest and North-Central to deepen an Eastern Half trough late in the period," MDA said. "The European models allow for this phasing of features to take place; although, this has been inconsistent within the model and not entirely supported by the American model at this stage.

"The result is a lowering in confidence but with the Euro as favored with the evolution. Despite this, warm anomalies average the period across most locales but fade in coverage during the second half."

On the technical side, ICAP Technical Analysis’s Brian LaRose said in a note following Monday's close that natural gas could be bottoming.

"Once again, a test of long-standing trend line support on the MarketVane bullish consensus reading was able to yield a bounce in the price of natural gas" suggesting potential "bottoming action," according to LaRose. "Would at the very least need to see the January contract better $3.111-3.122-3.138 for us to seriously entertain such a scenario.

"Still looking for a drop to $2.884-2.860-2.854 next if bulls are not up to the task."

January crude oil fell overnight and was set to open about 38 cents lower at around $57.73/bbl. January RBOB Gasoline was set to open down about a penny at $1.7779/gal.