June natural gas is set to open 5 cents higher Monday morning at $3.31 as traders digest a variable weather forecast and consider short hedges. Overnight oil markets rose.

Overnight weather model runs featured a mix of factors. “Changes over the weekend were mixed in this period, trending warmer along the East Coast and cooler in the Midcontinent,” said MDA Weather Services in a Monday morning report to clients. “The Northwest, however, is warmer versus both the Friday and Sunday reports. The forecast favors above normal temperatures remaining fairly steady in coverage in the Pacific Northwest while variability is the story for the Midcontinent.

“Near and slightly above normal temperatures are favored along the East Coast. Within the atmospheric background state is an MJO [Madden Julian Oscillation]-like feature out of phase four and propagating toward phase five, and associated -EPO [Eastern Pacific Oscillation] features.

“Features associated with the -EPO could leave the Midwest cooler as the Euro projects. GFS keeps the MJO focused in phases two-three, having confidence low in the forcing.”

In a weekly note to clients Mike DeVooght of DEVO Capital Management said, “Natural gas settled lower this week, giving back all of last weeks gains. Storage numbers came in line with expectations, but still smaller builds than normal, for this time of year. Natural gas could make another run if we get a warmer than normal summer. If natural gas does rally, we would use it as an opportunity to add to current hedge positions.

“On a trading basis, continue to add to producer hedges on natural gas rallies above $3.50 on the 12-month forward strip. Call for pricing and recommendations.”

In overnight Globex trading the expiring June crude oil contract rose 64 cents to $50.97/bbl and June RBOB gasoline added a penny to $1.6623/gal.