April natural gas is set to open 7 cents lower Tuesday morning at $2.83 as weather forecasts call for a milder mid-section of the country and traders continue to recommend a short market stance. Overnight oil markets rose.

Overnight weather models showed a near-term loss in heating load. “[Tuesday’s] six-10 day forecast is a bit colder across the southern tier and East Coast but is much warmer over the Rockies and Midcontinent,” said WSI Corp. in its Tuesday morning report to clients. “The warmer changes offset the colder ones, so GWHDDs are down 4.6 to 103.4 for the period.

“Forecast confidence is only average at best today. Confidence has actually improved early in the period based on better model agreement and some consistency with the storm track. However, confidence is lowest late in the period as there is uncertainty with how quickly the Pacific-driven pattern will begin to break down.”

Traders are maintaining a bearish posture.

“We are maintaining a bearish trading stance and would suggest holding April futures positions established last week above the $2.80 level,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients. “We are still suggesting stop protection above $2.95 on a close-only basis while we still see eventual downside possibilities to around $2.52. While we may be forced to adjust our downside expectations higher unless mild temperatures return, we still see a revisit to last month’s lows of $2.64 as high probability.

“This week’s EIA release won’t likely have much price impact from either direction, but we feel that another downsized storage withdrawal in the 50-60 Bcf area will be forthcoming. Such a decline would imply further expansion in the supply surplus of more than 70 Bcf. And although some surplus contraction would appear likely later this month, we feel that a supply excess against averages of around 10% will be able to contain price strength below the $3 mark, even with the rollover to the higher-priced May futures.

“From a longer-term perspective, this looks like a trade that will remain confined to about the $2.50-3.00 zone within a one-month time frame followed by a gradual uptrend into the summer period should production continue to fall short of our expectations.”

In overnight Globex trading April crude oil rose 30 cents to $53.50/bbl and April RBOB gasoline gained 3 cents to $1.6989/gal.