May natural gas is set to open 3 cents higher Monday morning at $1.93 as traders note a somewhat supportive weather outlook and discount any oil-related impacts. Overnight oil markets tumbled on the failure of OPEC to reach agreement on production stabilization.

Risk managers see the market awaiting an idea of how the summer cooling season develops. “Natural gas will most likely be in a holding pattern until we get closer to the summer cooling season,” said Mike DeVooght, president of DEVO Capital, a Colorado-based trading and risk management firm. “If we get warmer than normal temperatures early in the season, we could move back into the mid-$2 range. On a trading basis, we will continue to stand aside and await further developments.”

DeVooght, however, does recommend that should the April-October strip reach $2.70, producer hedges should be implemented. The strip settled Friday at $2.127.

Commodity Weather Group in its Monday morning report noted cooler temperatures in more deferred time periods. “The themes noted in yesterday’s outlook continue again [Monday] with warmer changes this week over the Midwest and East contributing to some demand loss and then cooler changes in the six-15 day over these same areas edging up late-season heating degree days (with primary impacts in the overnights over the Midwest and upper East).

“The upper-level pattern through the six-15 day continues to look fairly complicated, with high-latitude ridging into upper Canada and lots of undercutting energy into the West that brings precipitation there and across into Texas. By late spring, westerly/active Pacific flow offers more cooler than warmer risks,” said Matt Rogers, president of the firm.

Market technicians see the market needing to hold key support levels if a test of previous market lows is to be avoided. “a=c off the $2.074 high targets the $1.869-1.862-1.842 zone; 1.618 a=c of the same targets $1.757,” said Brian LaRose, an analyst with United ICAP, in closing comments Friday.

“If natgas is going to have a chance at avoiding new lows these are the levels that should be able to provide support. Fail to find support and we would expect the $1.611 low to be challenged. Like last year, I suspect the direction of the rest of the petro complex will dictate where natgas goes from here.”

In overnight Globex trading May crude oil dropped $1.77 to $38.59/bbl and May RBOB gasoline fell 4 cents to $1.4365/gal.