January natural gas is expected to open 6 cents higher Monday morning at $3.85 as last week’s weather predictions continue to develop as planned. Overnight oil markets rose.

Much of Friday’s 16-cent surge was predicted on colder temperatures emerging in the waning days of December. For the moment, traders like what they see.

“The weekend modeling fared fairly well in continuing to gradually advance forward a significant pattern change. We still have warmer issues currently, with strong above-normal anomalies currently rolling through the Midwest, but some storminess toward the East Coast early in the six-10 day period could offer some colder risks to the forecast,” said Matt Rogers, president of Commodity Weather Group in a Monday morning report.

“Some models are delivering accumulating snowfall to the big East Coast cities that could offer some lingering colder impacts into early next week before the bigger upstream colder pattern changes take hold. The various modeling continues in good agreement on rebounding a ridge of high pressure over Alaska, with many of them also generating North Atlantic ridging to also support a stronger cold pattern. Our current estimate brings colder than normal temperatures to the upper Midwest by Dec 26, Texas by Dec 27, and East Coast by Sun Dec 28th, but the timing/intensity could vary and come in stronger.”

Risk managers counsel a measured strategy to deal with the market. “By week’s end, the natural gas market was able to rally back up and settle slightly higher as the weather forecast predicts below-average temperatures on the East and West coasts,” said Mike DeVooght, president of DEVO Capital. “We still feel the high $3.00 level will provide support in natural gas, and feel there is a good chance of a rally as we approach year-end. The funds are still carrying a near record short position in the gas market.

“Considering the complex is as weak as it is, the rally if it should occur, will probably not be as dramatic as it was early this year. On a trade basis, we will continue to hold our long call/short put positions. For producers, we will wait for higher prices before we establish any short hedges.”

DeVooght currently recommends trading accounts hold a long Jan $4.20 call option alone with a short January $3.90 put. He also says to “hold long February $4.20 call and short February $3.90 puts. End-users are advised to hold long January $4.20 calls and Short January $3.90 puts as well as hold long February $4.20 call and short February $3.90 puts.

In overnight Globex trading January crude oil added a penny to $57.82/bbl and January RBOB gasoline rose a penny to $1.6056/gal.