The expiring June natural gas contract is expected to open a penny higher Friday morning at $3.19 as traders note little downside to an oversupplied market. Overnight oil markets were narrowly lower.

Analysts don’t see much in the way of market downside unless some events can materially affect the trend of a diminishing long-term supply surplus.

“Although the initial response to yesterday’s moderately bearish weekly storage report appeared appropriate, downside price follow-through remains elusive, and key support levels managed to hold once again,” said Jim Ritterbusch of Ritterbusch and Associates in a morning report to clients. “June futures are going into today’s expiration virtually unchanged from a month ago, and July futures may not be posting much alteration at about this time next month.

“Although a supply surplus is likely to remain intact well into the summer period, the market is currently being supported by a reduction in this surplus that will continue to restrict selling until temperatures and some of the non-weather factors facilitate a reversal in this recent trend. In other words, this market may need some indication of a significant increase in the storage overhang if yesterday’s lows are to see violation.”

As far as longer-term weather patterns NOAA forecasters said Thursday they expect 11-17 named storms to form in the Atlantic Basin this year, with five to nine of them becoming hurricanes, including two to four major hurricanes (Category 3 or higher).

Offshore Gulf of Mexico production has diminished in importance over the years. Energy Information Administration figures peg current output at 3.4 Bcf/d, down from five years ago when it was 4.5 Bcf/d.

Traders have a range of forecasts to choose from. The NOAA numbers are higher than earlierpredictionsby two other prominent weather forecasters. In an extended-range forecast released in April, scientists at Colorado State University (CSU) said they expected slightly below-average activity in the Atlantic Basin this year, with 11 named storms, of which four are expected to become hurricanes, including two major hurricanes. AccuWeather meteorologists have said they expect 10 named storms in the Atlantic this year, of which five could become hurricanes, including three major hurricanes.

Gas buyers for weekend supplies for electric power generation across the MISO footprint will have their hands full. “An active, stormy and changeable pattern is expected,” said WSI Corp. in its morning report to clients. “Variably cloudy and warm conditions are expected [Friday], though a weak frontal system will likely touch off a few showers or thunderstorms across the Midwest.

“Temps will rebound into the 70s and 80s. A vigorous storm system will dig into the power pool during the weekend with a risk for scattered heavy showers and thunderstorms. Severe weather is a risk across the lower Midwest and Mississippi Valley.

“Light wind generation is expected during the next one to two days. Output will bottom out around 1-3 GW. A west-northwest wind associated with the weekend storm will likely bolster wind generation output during Saturday night through early next week. Total output is forecast to peak 8-10 GW.”

In overnight Globex trading July crude oil fell 28 cents to $48.62/bbl and July RBOB gasoline fell fractionally to $1.6017/gal.