February natural gas was set to open Tuesday about 9 cents higher at around $3.314 as one of the major weather models continued to show another round of Arctic cold arriving early next month.
"The latest overnight data was colder trending in the European model for the first week of February, while the Global Forecast System (GFS) was little changed but also showed frigid Arctic air spilling across the border into the northern U.S.," said NatGasWeather.com Tuesday.
"The European model remains colder than the rest of the data," and Tuesday's midday data could "either show the GFS trending colder Feb. 3-5 or the afternoon European trending back a little milder," the firm said. "But for this morning, since the European trended further colder by arriving a day earlier, markets are likely to view it as colder trending overall."
In its 11-15 day outlook Tuesday, Radiant Solutions noted a series of patterns developing, including "a ridge building into the Gulf of Alaska," that would result in "the establishing of an Arctic connection, and the forecast has below and much below normal temperatures pressing into the Midcontinent.
"However, a lack of colder air masses reaching the East Coast leaves that region on the warmer side of normal while aboves are also featured in parts of the Southwest," the firm said.
Natural gas is "not backing off the highs," noted ICAP Technical Analysis analyst Brian LaRose following Monday's settle. "And that suggests the bulls are not ready to relinquish control. If this is the case, it should not take much effort to lift natural gas up and over the $3.303-3.310 area.
"...Fail to clear $3.303-3.310 Tuesday, expect more congestion between $3.288 and $3.013 near term."
Powerhouse President Elaine Levin said Monday that the February contract would probably need to close above last week's intraday high of $3.288 to break out of the current trading range.
Meanwhile, early estimates point to another potentially large storage withdrawal for the week ending Jan. 19. Stephen Smith Energy Associates, in its latest Weekly Gas Outlook, was calling for a 268 Bcf pull, versus a seasonally normal withdrawal of 174 Bcf based on 2006-2010 norms.
March crude oil was set to open about 61 cents higher at around $64.18/bbl, while February RBOB gasoline was up about 2 cents to $1.9011/gal.