The June natural gas contract was set to open Tuesday about a penny higher at around $2.853/MMBtu, building on Monday’s rally as analysts see the bulls potentially losing steam ahead of weekly storage data expected to show a larger-than-average build.

EBW Analytics Group CEO Andy Weissman noted that on Monday the June contract repeatedly tested resistance at $2.84, “trading as high as $2.847 before retreating slightly at the end of the day.

“Given the trading pattern for the last few sessions, it would not be surprising if the June contract continued to test resistance” on Tuesday, “potentially as high as $2.873,” Weissman said. But by Wednesday “profit taking is likely” in the lead-up to Thursday’s Energy Information Administration (EIA) storage report.

“If the EIA-reported build is close to expected levels, a near-term peak might be in place through at least Memorial Day,” he said.

Intercontinental Exchange EIA storage futures settled at Monday at an injection of 105 Bcf. Last year, EIA recorded a 64 Bcf build for the period, and the five-year average is an 87 Bcf injection.

The June contract “saw some follow-through to the upside” during Monday’s session, analysts with Rafferty Commodities Group told clients. “We had listed $2.849 as our second minor resistance level, and the high was $2.847. Yesterday, we had stated that the inability of the market to take out a resistance level would be a signal to liquidate and reverse course.

“The longer-term phase of the market is still in consolidation,” according to analysts. “This means that we cannot get married to a position for too long in any one direction until the market demonstrates, via a close, that it can break beyond our major numbers...The $2.864 level is our second minor resistance, and a failure of the market test this area would present a good selling opportunity.”

Turning to the forecast, said it observed “only slight changes in the overnight weather data as the second half of May looks to play out mostly comfortable across the northern U.S. with highs of upper 60s to mid-80s, while the southern U.S. will be very warm with highs 80s to lower 90s, locally 100s over the Southwest. It’s expected to a little warmer than normal overall the next two weeks for almost the entire country, but still early enough in the season where impacts aren’t as noticeable.”

NatGasWeather analysts said it appears the burden has shifted to production to demonstrate that it can reduce the current large storage deficits.

“Bulls remain in control” as long as June stays above $2.74, “but more importantly it will be quite a feat if they can hold $2.80 this week,” the firm said. “If so, we see it being due to either seasonal buyers stepping in and/or the natural gas markets realizing it’s going to be a very slow process reducing deficits.

“Again, for the first time in many years, we see the pressure on production reducing deficits and doing the heavy lifting instead of weather patterns carrying the burden of increasing them.”

June crude oil was set to open about 73 cents higher at around $71.69/bbl, while June RBOB gasoline was trading fractionally higher at around $2.2092/gal.