Natural gas futures were trading slightly higher early Monday, but analysts saw little upside for prices as mild weather is expected to start the injection season. The May contract was up 0.8 cents to $2.670/MMBtu at around 8:30 a.m. ET.

Weather models underwent a mix of changes over the weekend, according to Bespoke Weather Services, which pointed to a warm change in the six- to 10-day period and a “small cooler change” in the 11-15 day time frame. Guidance overall showed the first half of April coming in warmer than normal, the forecaster said.

“Our sentiment remains slightly bearish this morning as we saw a further uptick in production in the weekend data along with continued low” liquefied natural gas “exports, and a weather demand picture that is lower overall for the first half of April when compared to Friday’s forecast,” Bespoke said. “This morning’s production data shows a sizeable drop, but this is very common for the first day of the month, so should only offer temporary support at best, as the number is likely to be revised back higher.

“Demand gradually lowers each day this week, and wind picks up, especially in the middle of the week, so there is the risk that cash prices are weaker over the next few days.”

Given the number of factors potentially weighing on prices, Bespoke said it’s possible the May contract tests the $2.60-2.65 range this week.

Radiant Solutions also noted warmer changes in its six- to 10-day forecast Monday. The changes were “focused from Central to East when compared to Friday’s expectations and lean warmer in the South versus the Sunday report as well…

“Above normal temperatures are widespread in coverage in the composite, and this includes a round of much aboves preceding low pressure through the Midwest at mid-period and the East Coast around Day 9.”

In the 11-15 day period, Radiant’s latest outlook showed cooler trends compared to previous forecasts.

“However, a split flow setup remains favored, with an active southern branch of the jet stream providing rounds of unsettledness into the Midcontinent and South,” the forecaster said. “Above normal temperatures are forecast ahead of this storm track in the South, while belows are left in its wake in the Interior West.”

Prices could be in for “significant further losses” as injection season ramps up, according to EBW Analytics Group CEO Andy Weissman.

“The May contract lost 10.5 cents last week as the withdrawal season came to an end. While a cold shot this past weekend prevented even steeper declines, the picture for natural gas this spring continues to look bearish, with few if any positive catalysts in sight,” Weissman said. “For the next few weeks, the main story is likely to be the rate at which the storage deficit declines.

“While the injection for Week 1 is modest, weekly injections are likely to increase rapidly in Weeks 2, 3 and 4 -- potentially reaching as high as 110-120 Bcf by mid-April and continuing at triple-digit levels in most weeks this spring.”

With the unusually cold April 2018 as the historical comparison, the year/year storage deficit could “rapidly vanish” in the coming weeks, potentially flipping to a 300 Bcf or more surplus by the end of May, according to Weissman.

“The deficit versus the five-year average could also disappear before May is over, potentially driving gas prices at Henry Hub well below $2.50 by mid-May,” he said.

At around 8:30 a.m. ET, May crude oil was trading 71 cents higher at $60.85/bbl, while May RBOB gasoline was up fractionally to $1.8890/gal.