November natural gas is set to open a penny higher Tuesday morning at $4.16 as traders deal with the uncertainty of forecast cold expected later this week. Overnight oil markets inched higher.

Analysts question whether another series of winter price spikes may be on the horizon inasmuch as Producing Region output is decreasing, and pipeline deliverability for the most part remains configured to bring supplies from the Producing Region to markets in the Northeast. In all likelihood increased Marcellus capacity won’t be able to make up a severe weather driven deficit.

“Until last winter, price spikes for spot gas deliveries had largely been relegated to just a few constrained Northeast trading points. This dramatically changed as gas utilities across the country scrambled to secure supplies to meet the surge in heating demand in January,” said Teri Viswanath, director of commodity strategy for natural gas trading at BNP Paribas in a note to clients. “The resulting stampede for physical supplies lifted cash prices in every reporting region, with locations in the Northeast, Midcontinent and Midwest regions reporting new all-time highs. The cause of the coast-to-coast price spike was the systematic reduction in swing supplies. This year, with the Producing region remaining understocked going into the winter, another system ”stress-test’ might develop.”

Monday saw something of a weather-driven price spike Monday. “Although we had left open the possibility of an advance in the newly prompt Nov contract to the $4.16 area, we didn’t expect such a run to develop this early,” said Jim Ritterbusch of Ritterbusch and Associates. “Strength is mainly weather driven as most forecasters are looking at significantly below normal temperature trends to begin later this week and extend toward mid-October in some cases. The elevation in HDDs appears sufficient to stall the dynamic of deficit contraction that has provided the primary theme behind our bearish stance until recently. We have shifted to a neutral posture in anticipation of some wide price swings but with the market likely to show little change from the $4 mark a week or two down the road.”

Forecasters are debating as to how much cold air will actually make it south. “The weather models are still struggling on just how much cold Canada air will be tapped by the next series of weather systems that begins to play out later this week over the northern US,” said in its morning outlook. “The uncertainty is expected to lead to varying national temperature forecasts, especially after October 8th. As we have been mentioning, these cool blasts will drive stronger heating demand, but they aren’t exceptionally cold, at least when considering it in terms of standard deviations. So while we suspected this coming cooler pattern would generate market hype, it’s likely not quite intimidating enough to bring a sustained and prolonged rally.”

In overnight Globex trading November crude oil gained 3 cents to $94.60/bbl and November RBOB gasoline rose fractionally to $2.5160/gallon.