May natural gas is set to open a penny higher Tuesday morning at $4.57 as traders discount the breach of a monthly trend line and mull increased storage injections. Overnight oil markets slumped.

Analysts remain bullish and look for continued market consolidation. “From here, we see further consolidation within about the $4.50-4.60 zone until volatility begins to lift late Wednesday amidst usual positioning ahead of the EIA storage release,” said Jim Ritterbusch of Ritterbusch and Associates.

“We will be looking for an injection of about 27 Bcf, a figure slightly above a year ago but less than the five-year average build of around 37 Bcf. Implied is a further expansion in the storage deficit against average levels, with the shortfall stretching to slightly above the 1 Tcf mark. We are maintaining a bullish trading stance, and we were not surprised by the pullback into the $4.50-4.60 zone given last week’s apparent overreaction to a supportive supply hike. We have advised using this area as an opportunity to establish fresh longs in anticipation of an advance to the $4.80 area within about a two-week time frame.”

Other market observers see gas storage injections at eastern facilities beginning in earnest and look for a heftier weekly build. “Lingering heating demand has delayed the conversion of several of the eastern storage fields, contributing to last week’s lower-than-expected injection,” said Teri Viswanath, director of commodity strategy at BNP Paribas. “However, it now appears that a number of the larger storage fields in the East Consuming region have finally begun to report net injections, boosting the aggregate week-on-week storage build. This development should enable the industry to significantly outpace last year’s 25 Bcf injection as well as the five-year average of a 37 Bcf build. We expect that the analyst predictions for last week’s injection will range from a 45 to 52 Bcf build,” she said in a morning report.

Mike DeVooght, president of DEVO Capital, said to “hold short positions and look for the market to continue to work back toward the $4 level.” He said trading accounts should continue to hold a short May futures position rolled from a short April at $5.00 to $5.10 and end-users should stand aside. Those with exposure to lower prices should maintain a short May-October strip from $4.20 to $4.30 and also a second short summer strip initiated at $4.50.

In overnight Globex trading May crude oil fell 90 cents to $103.15/bbl and May RBOB gasoline shed a 2 cents to $3.0170/gal.