Natural gas futures were trading slightly higher early Tuesday as forecasters continued to point to a potential shift toward colder temperatures around the middle of the month. The January Nymex contract was up 1.1 cents to $2.893/MMBtu at around 8:45 a.m. ET.

NGI Morning Natural Gas Price & Markets Coverage

The European weather model trended milder overnight by showing less cold moving into the United States this weekend and next week, bringing it into better agreement with American modeling, according to NatGasWeather.

The pattern for this week through Dec. 13 “just isn’t as cold as needed without colder trends,” the firm said.

However, “we continue to see a potential major pattern shift around Dec. 14-16 to allow better opportunities for stronger cold shots into the U.S.,” NatGasWeather said. “This needs close watching as colder-trending patterns for mid and late December can occur quickly.”

Analysts at EBW Analytics Group viewed overnight changes in the natural gas price outlook as mixed.

“The European and American models shifted bearish overnight, with significant degree day losses in days three through 11,” the EBW analysts said. On the other hand, liquefied natural gas feed gas volumes “surged to record levels. Further, even with this morning’s losses, space heating demand” for the next three storage weeks “is expected to remain far above recent levels.

“This should keep prices at Henry Hub, which gained 59.5 cents yesterday, strong — limiting futures’ downside risk.”

The European modeling shows a cold signal at the end of the 15-day forecasting window that could boost heating demand heading into mid-December, according to EBW.

“It’s too early to know if this will stick,” the EBW analysts said. “If it does, however, futures could rise sharply as December unfolds. Stay tuned.”

From a technical standpoint, the January contract made a “nice turn higher” in Monday’s session, but bulls still have the “immediate task” of pushing prices above $3.002, according to ICAP Technical Analysis analyst Brian LaRose.

“Bust through and the bulls will have a chance to continue chipping away at the ratio retracements associated with the $3.507 high,” LaRose said. “Fail to promptly clear $3.002 and the bulls run the risk of affording the bears another opportunity to make a run at the $2.656 low.”

January crude oil futures were down 29 cents to $45.05/bbl at around 8:45 a.m. ET, while January RBOB gasoline was down fractionally to $1.2353/gal.