May natural gas was set to open Friday about 2 cents higher at around $2.680, recovering somewhat after a 7.9-cent sell-off Thursday that came despite tighter-than-expected government storage data.

Bespoke Weather Services described the early morning gains as “somewhat of a dead cat bounce, with very little volume or support from the strip.”

Thursday’s Energy Information Administration (EIA) storage report, which missed firmly to the bullish side of expectations, helps offset somewhat bearish overnight weather trends, according to the firm.

The forecast overnight was “slightly less the short-term as cold eases in intensity through the weekend and long-range forecasts now show heating demand around to a bit below average,” Bespoke said. “We are tracking one last cold shot focused around April 29 that should briefly pull gas-weighted degree days back above average, though recent guidance does not show anything too impressive that would be able to get cash prices really moving.”

EIA reported a 36 Bcf withdrawal from Lower 48 gas stocks for the week ending April 13, an unusual pull from inventories during injection season thanks to uncharacteristically cold weather during the period. Last year, 47 Bcf was injected, and the five-year average is a build of 38 Bcf.

On a weather-adjusted basis the gas market “returned to less than 1 Bcf undersupplied, ending a two-week trend of oversupply,” analysts with Tudor, Pickering, Holt & Co. (TPH) said Friday. “Counter-seasonal draws are expected to continue one more week, with preliminary estimates around 12 heating degree days above five-year averages,” implying undersupply of more than 2 Bcf/d.

“Long-term, however, expect temperatures to be warmer as we transition into injection season,” the TPH analysts said. “Mexican exports remain below January/February levels” presenting “a red flag for those betting on Mexican demand to bail out the Permian.” Meanwhile, liquefied natural gas exports are “ramping, though somewhat volatile,” with Dominion Energy’s Cove Point export project “moves toward sustained operations.”

After the recent cold weather across the Midwest and Northeast, Societe Generale analyst Breanne Dougherty said she expects “the net storage injection pace this month to be under 2 Bcf/d. This is the lowest level in our history set -- very low compared to the five-year average of 7 Bcf/d.

“We remain at a loss as to why the market is not translating such a bullish signal into forward prices,” Dougherty said. “If anything, over the last few weeks summer 2018 fundamentals look more supported, yet 3Q2018 is trading around $2.75/MMBtu, and 1Q2019 under $3/MMBtu.”

Societe Generale expects 3Q2018 prices to average $3.00, with 1Q2019 presenting a potential “buy opportunity at the moment given our expectation that if bullish sentiment is to make its way into the market this summer, there will be a significant number of participants” flocking to  those contracts, which could drive up prices “even if only for a few months time.”

Societe Generale’s forecast for end-of-October inventories has been coming in around 3.55-3.65 Tcf, versus 3.78 Tcf last year, she said.

May crude oil was set to open about 39 cents lower at around $67.90/bbl, while May RBOB gasoline was trading down about a penny at around $2.0673/gal.