Natural gas futures were trading slightly higher early Tuesday, with the range-bound front month adding a couple pennies amid a mix of overnight weather trends. The June Nymex contract was up 2.2 cents to $2.546/MMBtu shortly after 8:30 a.m. ET.

Overnight guidance was mixed, according to NatGasWeather, which said the Global Forecast System added some demand to the outlook, while the European model lost some demand.

“The data held cooler than normal temperatures sweeping across the country next week, including deep into the southern U.S.,” the forecaster said. “This is where the greatest change in the forecast has occurred since last week, but again, it’s not enough to prevent bearish headwinds from continuing as 100-plus Bcf builds line up” for multiple weeks out, potentially throughout the month of May.

“Essentially, bearish weather sentiment should be expected to continue until more extreme heat builds,” NatGasWeather said. “We do expect hotter than normal summer temperatures across much of the country starting in early June, but until then the markets will need to ride out steady bearish weather headwinds.”

Energy Aspects issued a preliminary estimate for a 96 Bcf build from this week’s Energy Information Administration (EIA) storage report for the week ending May 3. That’s based on a 0.2 Bcf/d week/week drop in supply and a 1.4 Bcf/d week/week increase in power demand. The firm had been looking for a triple-digit weekly injection before a combination of heating and cooling demand “chipped away” at the expected build.

“Without the emergence of more sustained hot weather in May, the start of the injection season is far from constructive,” Energy Aspects said. “Indeed, weather forecasts suggest May could be a record-breaking month, potentially recording the top three storage injections of all time, or at least the second and third spot...Currently, we are seeing such strong builds without production even hitting the peak weekly readings seen in December.”

The most recent Commitment of Traders data from the Commodity Futures Trading Commission showed professional speculators as a group liquidating length compared to the prior week, while commercial hedgers bought to cover short positions, all as prices rallied, according to INTL FCStone Financial Inc. Senior Vice President Thomas Saal.

That the market broke below long-term support at $2.50 late last month is “significant,” Saal told NGI. “The question is now that we’ve done that, are we treading lower? The short answer is yeah,” he said.

For now, without significant weather-driven demand to drive higher prices speculators could look for opportunities to sell, either liquidating longs or adding new short positions, according to Saal. But the outlook could change.

“Everybody’s looking for hot weather. That will definitely increase demand, and then inventory levels will start to get smaller,” Saal said. “Because now there’s no significant demand to compete with the injection gas. With more retired coal units, demand could be high if the weather gets hot in most of the gas-consuming areas of the country. So it’s not like it’s just going to roll over and die here.

“There’s a window here where they could push it lower without having more of the demand stimulus to help push prices higher.”

June crude oil futures were down 67 cents to $61.58/bbl shortly after 8:30 a.m. ET, while June RBOB gasoline was off around 4.5 cents to $1.9513/gal.