June natural gas is set to open a penny higher Wednesday morning at $3.20 as traders continue to factor in cooler temperatures going forward and early data suggests a small contraction in the storage surplus. Overnight oil markets rose.

Analysts are questioning whether the current 299 Bcf year-on-five-year inventory surplus is too much to sustain current price levels.

“[T]he market has been tracking the five-year average price, but this may not be a sustainable valuation given that the April 21 storage total was 299 Bcf (15.8%) above the corresponding five-year average storage benchmark,” said Tim Evans of Citi Futures Perspective in closing comments Tuesday.

“It may also be a reflection of the market’s overbought condition, with money managers still holding substantial long positions in the CFTC data from April 25.”

Weather forecasters see only modest changes to forecasts of cooler conditions. “Mostly minor changes are noted overall [Wednesday], with nearly flat total demand adjustment estimates,” said Matt Rogers, president of Commodity Weather Group, in a Wednesday morning report to clients. “The short range is coming in a bit warmer toward the coasts and cooler toward the South. The 6-10 day is shifting slightly warmer for the Midwest and cooler toward the coasts, while the 11-15 day is edging cooling in the West and warmer in the East. The models are in fairly good agreement right now on the overall forecast, which continues to see more cooler than warmer conditions nationally.”

Cooler forecast temperatures on the horizon notwithstanding, the National Weather Service (NWS) predicts heating load in key eastern markets to be well below normal. For the week ending May 6, NWS sees New England at 69 heating degree days (HDD) or 24 below normal. New York, New Jersey and Pennsylvania are expected to have 54 HDDs or 21 fewer than normal. The greater Midwest from Ohio to Wisconsin is forecast to see 75 HDDs, or four fewer than normal.

Early data suggests that the trend of small decreases in the year-on-five-year storage surpluses is intact. The Desk Early View survey for Thursday’s storage report showed an average 61 Bcf injection from a sample of 11 traders. Last year 68 Bcf was injected but the five-year average comes in at 63 Bcf. The range on the survey was from 54 to 74 Bcf.

In overnight Globex trading June crude oil rose 27 cents to $47.93/bbl and June RBOB gasoline gained 3 cents to $1.5379/gal.