The expiring July natural gas futures contract is expected to open 10 cents higher Tuesday morning at $2.82 as weather forecasts shift to a re-emergence of warmer than normal patterns across much of the country. Overnight oil markets rebounded.

In spite of abundant, if not burdensome, supplies, traders don’t see a lot of mileage in pursuing the short side of the market. “This market has spiked this week as consensus of temperature forecasts has shifted away from a cool Midcontinent trend and back toward hot patterns across most of the U.S.,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning report to clients.

“This shift will generally maintain a trend of sharply downsized storage injections that have kept the supply surplus in declining mode throughout the recent spring period. Evolving shifts beyond the weather factor are also developing to support the spot market in a process of strengthening the gas curve ahead of today’s July contract expiration.

“Narrowest contango in the front July-August spread since January is being seen this morning with a miniscule 2.5-cent contango comparing with an approximate 11-cent carrying charge seen just a month ago. Until the natural gas time spreads show evidence of sustainable reversal, we will likely steer clear of the short side of this market.”

Technical analysts versed in Elliott Wave and retracement analysis see the natural gas market as having completed a normal advance from recent lows. However, the case is not clear as to whether this is the end of the line for further futures gains. “As our $2.763-2.854-2.870 target was met, we can make a pretty good case for a completed five-wave advance up from the $2.080 low in the July contract,” said Brian LaRose, a technical analyst with United ICAP.

“However, there has been no rollover on the technical front. Typically, a technical shift will precede a price shift. That has not happened. Will be interesting to see if the August contract can continue to climb higher from here following July expiration.”

Gas traders in the daily market focused on California and western points will have their hands full as temperatures are expected to be well above normal. “A cold frontal boundary will generate active weather over the Plains on Tuesday, while temperatures spike above normal over the intermountain West and the Great Basin,” said Kari Strenfel, a meteorologist at

“Monsoonal moisture and daytime heating will trigger isolated showers and thunderstorms over the desert Southwest, the southern Sierra Nevada, the southern Great Basin and the lower intermountain West. Temperatures will be 10 to 15 degrees above normal across most areas west of the Plains. Heat advisories will stay in effect for central Nevada and parts of Southern California.”

In overnight Globex trading August crude oil rose $1.23 to $47.56/bbl and August RBOB gasoline gained 3 cents to $1.5180/gal.