July natural gas is expected to open 5 cents higher Wednesday morning at $2.34 as traders attempt to digest a significant shift in medium-term weather patterns and cogitate on technical price objectives. Overnight oil markets fell.

“A shift in the weather pattern is ongoing for much of the country as June begins,” said Linda Lam, a meteorologist with Wunderground.com.

“This shift is bringing temperature changes for many, as well as an increase of showers and thunderstorms across portions of the South and East. An upper-level trough, or southward dip in the jet stream, that has been in place over the West is slowly sliding eastward and being replaced by an upper-level ridge of high pressure, pushing the jet stream well into western Canada.

“Hot temperatures will build across the West as the week progresses, just in time for the start of meteorological summer (June 1-Aug. 31).

“Meanwhile, cooler conditions will be found across parts of the East, although for most locations highs will be close to average for this time of year.”

Technical analysts were looking for the July contract to jump higher after June went off the board. “We got our pop. The question now, just how much higher can natgas go from here?” said Brian LaRose, a market technician with United ICAP. “See three possible targets. In the most bearish case natgas will not get above $2.292-2.294. In the bullish case natgas is headed to $2.474-2.493-2.568. Between these two objectives $2.382 is the only other level that stands out,” he said in closing comments Tuesday.

Despite the obvious correlation between the July contract’s 12-cent price surge Tuesday, analysts see the market responding to previous lean storage builds. “While the temperature forecast pointed to somewhat more power sector demand for cooling than on Friday, we view the price surge as more of an intermediate-term catch-up move for the reduction in the storage surplus over the past six weeks than a reflection of the latest weather outlook,” said Tim Evans of Citi Futures Perspective.

Evans calculates a build of 96 Bcf in Thursday’s storage report, well below last year but about on target with the five-year average. The year-on-five year surplus is expected to drop from its current 769 Bcf to 732 Bcf by June 17, and “this fundamental price trend tends to limit the downside for prices and often translates into higher prices over the intermediate term, just as the higher lows registered last week and Tuesday’s price rally tend to confirm.”

In overnight Globex trading July crude oil fell 50 cents to $48.60/bbl and July RBOB gasoline fell a penny to $1.6017/gal.