With the latest forecasts showing milder conditions taking hold later this month, natural gas futures were trading slightly lower early Tuesday. The May Nymex contract was off 2.9 cents to $1.695/MMBtu at around 8:40 a.m. ET.

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Changes in the overnight guidance were mixed, with the Global Forecast System (GFS) adding around 10 heating degree days for the period from April 21-28 but with the European model trending slightly milder, according to NatGasWeather.

“Both are still quite chilly versus normal through the coming weekend” before cold retreats into Canada, resulting in “mild to warm conditions gaining across most of the country besides the very far North, just with the European model warming the Great Lakes and Northeast quicker,” the forecaster said.

“To our view, even with the GFS trending colder overnight, the pattern is likely considered cold enough the next seven days but not cold enough for forecast week two, especially since the overnight European model remained rather bearish with the setup April 21-27.”

Meanwhile, looking ahead to this week’s Energy Information Administration (EIA) storage report, Energy Aspects issued a preliminary estimate for a 60 Bcf build for the week ending April 10. The firm’s estimates show “plummeting demand” during the period, including a 1.6 Bcf/d week/week drop-off in residential/commercial demand and declines in liquefied natural gas feed gas (down 1.2 Bcf/d) and Mexican pipeline exports (down 0.6 Bcf/d).

“The last two EIA prints have underscored the beginning of notable losses in demand,” Energy Aspects said. “As a result, our weekly balances are pointing to an April net injection on the order of 240-260 Bcf. With mounting facility closures — both industrial and commercial — we caution that the margin of error on that estimate is larger than usual. We anticipate that weekly storage injections will flirt with the triple-digit level by the end of April.”

Balances do not appear to support the gains in the futures market last week, according to the firm.

“Futures are likely being held up by a combination of factors…The late-season burst of cold could be providing minimal support to prices, although we would argue that given the demand destruction already in progress, it is only a shoulder season band-aid,” Energy Aspects said. “The continued focus on associated production declines” tied to reductions in oil-directed upstream capital spending “is likely also still playing a role.”

May crude oil futures were down $1.11 to $21.30/bbl at around 8:40 a.m. ET, while May RBOB gasoline was trading about 2.9 cents higher at around 73.2 cents/gal.