October natural gas is expected to open 3 cents lower Wednesday morning at $2.70 as traders take on some moderately bearish weather headwinds and anticipate Thursday’s storage report. Overnight oil markets rose.

Weather forecasters don’t see much in the way of heat or cooling to encourage a bullish outlook. Natgasweather.com in a morning report said, “The latest overnight weather data continues to show a fairly bearish setup for the coming few weeks, likely through the rest of September. Over much of the U.S., it’s going to play out to the warm side, but for late September, we view this as bearish over the northern U.S. as little to no demand for heating will be needed, while only moderate demand for cooling will be required over the southern U.S., including Texas, Florida and California due to highs reaching the 80s to lower 90s, but still not quite impressive enough.

“Of importance, we still aren’t seeing any true cold blasts moving toward the Midwest and eastern U.S. for at least a couple more weeks, although, the northwestern U.S. will see some fall-like systems roll through with high-elevation snowfall.”

Forecast cooling requirements may not be much, but they are nonetheless well above seasonal norms. The National Weather Service (NWS) for the week ended Sept. 19 forecasts New England will see 28 cooling degree days (CDD), or 25 above normal. The Mid-Atlantic, including the populous states of New York, New Jersey and Pennsylvania, is expected to experience 28 CDDs, or 16 above normal. The greater Midwest from Ohio to Wisconsin should see 23 CDD, or 10 above normal.

Tim Evans of Citi Futures Perspective saw Tuesday’s weakness as a function of near-term weather forecasts and said, “The early consensus view for Thursday’s DOE storage report seems to be centered at 72-73 Bcf in net injections, modestly supportive compared with the 76 Bcf five-year average refill for the week ended Sept. 11.”

Evans forecasts a build of 66 Bcf and senses that the market might be set up for “a minor bullish surprise,” but going forward stout injections are expected to take the year-on-five-year surplus to 171 Bcf from its present 127 Bcf by Oct. 2. He still sees the potential for a seasonal rally capable of taking the market above $3.

Tom Saal, vice president at FC Stone Latin America LLC in Miami, in his work with Market Profile expects the market to test Tuesday’s value area at $2.765 to $2.747. Market profile methodology requires buying or selling price breakouts above or below the week’s initial balance, and this week’s initial balance Saal places at $2.771 to $2.695. Saal is not specific in his timing, but he expects the market to test a second value area at $2.812 to $2.774.

In overnight Globex trading October crude oil added 93 cents to $45.52/bbl and October RBOB gasoline gained 3 cents to $1.3628/gal.