November natural gas is expected to open unchanged at $3.81 as weather forecasts shift little and injections are seen likely continuing into November. Overnight oil markets continued their downward trek.

One analyst sees Tuesday’s decline as more the result of a change in the weather outlook than any sympathetic move lower with plunging oil prices. “The natural gas market came under selling pressure on Tuesday as the 11-15 day temperature forecast looked warmer than a day ago, with the reduction in heating demand allowing a larger rate of storage injections,” said Time Evans of Citi Futures Perspective. It was the lowest settlement by a spot contract ($3.816) since Sept. 23.

“An early edition of Bloomberg’s survey puts the median estimate at 92 Bcf, a more robust gain than the five-year average increase of 78 Bcf than our simple weather-based model produced,” Evans said. “As we’ve been noting, our model has performed poorly of late, suggesting that there have been other shifts in underlying supply and demand. Over the intermediate term, however, we still think the model has merit, and it currently points to above average storage injections through the end of the month.”

Evans’ calculations show that by the end of October the current year-on-five-year deficit shrinks from its current 378 Bcf to 312 Bcf with total storage at 3,520 Bcf, “with some further gains before seasonal heating demand reaches the point that it overbalances supply and withdrawals begin,” he said.

Evans has shifted an earlier buy recommendation on the November contract at $3.73 to the December contract at $3.83 with a protective stop at $3.58.

WeatherBELL Analytics in its Wednesday morning 20-day Energy Forecast expects below-average accumulations of both heating and cooling degree days for the next two weeks. Nationally, it projects 123.2 HDD (heating degree days), well below last year’s 156.8 HDD and a 30-year average of 138.1 HDD. Cooling degree days (CDD) are seen at 19, fewer than last year’s 20.8 CDD and a 30-year average of 25.8 CDD.

Joe Bastardi, WeatherBELL meteorologist, said, “A downturn of the SOI [Southern Oscillation Index] has started, which means we need to look for the modeling to start waffling in the longer term as the implications of the slowing of the easterlies in the tropical Pacific will lead to a reaction over North America. This most likely will happen in the Week three and Week four period.”

WeatherBELL places the August SOI at -10.1 and September at -6.6. An index of less that -8 generally indicates an El Nino event.

In overnight Globex trading November crude oil skidded $1.64 to $80.20/bbl and November RBOB gasoline shed 3 cents to $2.1073/gal.