Weekend gains in expected weather-driven demand and a decline in production helped to lift natural gas futures several cents higher in early trading Monday. The May Nymex contract was up 4.6 cents to $1.667/MMBtu at around 8:35 a.m. ET.

Weather models over the weekend extended “colder momentum” from last week, according to Bespoke Weather Services. This puts the 15-day outlook “on the cold side of normal” overall, even after factoring in the “very low demand” expected during the early part of this week, the forecaster said.

“Stronger upper level ridging around Alaska has become more of a mainstay in the forecasts ever since early last week, and even some occasional light ridging into Greenland comes into play as well, all of which leads to pushes of colder air southward out of Canada into the U.S. starting around the middle of this week,” Bespoke said.

“...At this point, it is safer to say that the large net increase we have seen in weather demand since early last week is a part of the move higher, as it is no longer something we can consider as negligible, although some of the move is likely just some short covering as well that may have occurred either way.”

Looking at the supply picture, over the last several days Lower 48 production has been in a “modest retreat” compared to March totals, driven primarily by declines in volumes coming out of Texas, according to Genscape Inc.

“Production from the weekend and today is averaging 92.3 Bcf/d, which is coming in about 0.94 Bcf/d lower versus March’s average,” Genscape senior natural gas analyst Rick Margolin said. “During the past three days, the largest declines are posting in Texas at more than 1.2 Bcf/d below March, followed by close to 0.2 Bcf/d of declines in the Permian and 0.1 Bcf/d out of the Bakken. These declines are collectively outweighing a small (0.1 Bcf/d) increase in Northeast receipts.”

The colder shift in the forecast has supported higher prices, but the “most important issues” for the natural gas market at this point could relate to the oil and what happens to associated gas production, according to EBW Analytics Group.

The firm said it places the odds of a production deal between the Organization of the Petroleum Exporting Countries and its allies at “less than 50/50.” But “oil storage is filling up even more rapidly than expected, potentially forcing oil field shut-ins soon. While Canadian oil fields and high-cost U.S. stripper wells are likely to be shut in first, if shut-ins in tight oil plays reach 1 million b/d or more, natural gas prices could receive a significant boost.”

May crude oil futures were off $1.05 to $27.29/bbl at around 8:35 a.m. ET, while May RBOB gasoline was down about 1.3 cents to around 67.9 cents/gal.