March natural gas is expected to open flat at $2.68 Tuesday morning as analysts concede the market’s ability to hold technical support yet remain wary of changes in weather and any new developments in production and storage. Overnight oil markets rose.

Market analysts are on the lookout for a change in weather forecasts amid an overall bearish price landscape. “This market has failed to share in the strong oil price advance of the past couple of sessions given its closer connection to the weather factor and due to a stall in the gas rig count reduction that have contrasted sharply with the dramatic plunge in the oil rigs,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients on Monday.

“All signs appear to be flashing green for a further lift in gas production through the spring and into the summer period. Although year over year output gains will begin declining as the year proceeds, a record output pace will still represent a formidable bearish force that will be elevating storage injections across the spring and summer period on virtually a weekly basis.

“Weekend updates to the short-term temperature views didn’t show much change from Friday, and we view the market as entering a period of time in which neutral-moderately cold temperature views will be considered bearish given this advanced stage of the heating cycle. The market is also being forced to factor in another sharply downsized storage figure per this Thursday’s Energy Information Administration report that could potentially represent about half of the decline seen last year during the final week of January. Given this implied sharp expansion in the year over year surplus, piecing together a meaningful price advance anywhere close to last week’s highs could prove difficult.

“Nonetheless, we can’t rule out a rebound to as high as $2.80 should the forecasts shift or Thursday’s supply draw miss average street ideas by more than 10-15 Bcf. Overall, we still see a solid dynamic of record production establishing a supply surplus by late February or early March in providing a sizable base with which to begin the injection cycle. We are maintaining a bearish stance for now in anticipation of a further price decline to the $2.50 area. We are also looking for the front February-March switch to swing to a contango to as much as 2 cents by week’s end.”

Power generators working within the broad MISO footprint may be able to temper their purchases of natural gas by midweek if forecast wind generation proves correct. WSI Corp. in its Tuesday morning forecast said, “High pressure will depart [Tuesday] allowing another arctic cold front and wave of low pressure to sweep across the north-central U.S. during the next couple of days with a couple of rounds of light snow. Another surge of unseasonably cold arctic air will likely pour into the power pool during Wednesday into Thursday.

“However, a southwest wind around departing high pressure and ahead of another cold front may lead to fair weather and a quick warm-up by Friday. Another cold front and ripple of low pressure may traverse the power pool as the weekend progresses with a chance of snow, mix and even rain.

“Light wind generation is expected today, but a boost of wind generation is expected during Wednesday. Output may climb to near 7-8 GW. After a brief drop-off, a gusty southwest wind should support a more prolonged period of strong wind generation during the end of the week. Output may occasionally push 8-9 GW,” the firm said.

In overnight Globex trading March crude oil gained $1.11 to $50.68/bbl and March RBOB gasoline added 3 cents to $1.5706/gal.