The expiring April natural gas contract is expected to open 3 cents higher Wednesday morning at $3.13 as spot futures trade at a new high overnight and both technicals and fundamentals appear to be aligning in the bullish camp. Overnight oil markets rose.

April futures traded as high as $3.140 in evening trading, a new high from the late-March low of $2.522. Market technicians are focusing on the May contract and see the potential for an advance of as much as another 18 cents.

“With April rolling off the board, our focus shifts to May,” said Brian LaRose, a market technician with United ICAP, in closing comments Tuesday. “Not a whole lot changes. To indicate a short-term top has formed, bears need to take out $3.097-3.081-3.071. At this time the only visible warning sign is bearish RSI divergence on the intraday chart. So as long as May can hold above this band of support, the door remains open for a push to $3.232-3.245-3.258, even $3.315-3.355 from here.”

Fundamental analysts hypothesize a tight market going forward, with lagging production leading to weak storage injections. “With every passing day of production trending under 71 Bcf/d our base case [approximately] 72 Bcf/d summer production expectation looks increasingly risky,” said Breanne Dougherty, an analyst with Societe Generale in New York.

“It would take material demand underperformance to offset any underperformance in production given the near-term structural impact of the latter. We see potential for slight price softening this spring as the market absorbs what we think will be underwhelming power generation data, but remain constructive on the near-term outlook for gas and warn of potential upside price volatility sessions in core demand months.”

Overnight weather data came in slightly more mild. “[Wednesday’s] forecast experiences a small national [heating] gain thanks to some slightly cooler eastern adjustments in the one- to five-day as well as some cooler shifts (essentially weaker warming) for the six- to 10-day in the Midwest to East,” said Matt Rogers, president of Commodity Weather Group in a morning report to clients.

“The West is also slightly cooler overall for the six- to 10-day. Some western cooler changes are also noted in the 11- to 15-day range, while the East edges slightly warmer overall. The main forecast problem appears to be navigating various storm systems through this unsettled pattern. The big picture still features enough Pacific flow to keep the warm prevailing narrative going, but individual storm details occasionally offer some transient cooling risks.”

The early read on storage for the week ending March 24 is for a withdrawal beyond historical norms. Estimates are coming in bullish at about a 44 Bcf withdrawal, according to The Desk Early View Survey.

The survey showed an average 44 Bcf pull with a range of -36 Bcf to -55 Bcf. Last year 19 Bcf was withdrawn and the five-year pace stands at a 27 Bcf decline.

In overnight Globex trading May crude oil rose 20 cents to $48.57/bbl and May RBOB gasoline added a penny to $1.6479/gal.