November natural gas is set to open a penny lower Wednesday morning at $2.49 as traders don’t see any cold temperatures until later in the week but look to enter the market on the long side. Overnight oil markets inched higher.

Forecasters see weather patterns setting up that could eventually lead to an incursion of cold Canadian air by the end of the week. “Fresh midday weather data continues streaming in, and we expect the pattern to remain fairly active, although important details need to be ironed regarding how weather systems develop and track across the U.S. after a brief break early next week,” said in a Tuesday update.

“Until then, a fresh weather system and associated cool front continues sweeping across the Midwest, Mid-Atlantic and Northeast with showers. While it will bring a noticeable drop in temperatures of around 10 F, it more importantly will open the door for colder weather systems Thursday through Sunday, resulting in a marked increase in overnight heating demand as temperatures drop into the upper 20s and 30s for the first time this winter season.”

Estimates of Thursday’s Energy Information Administration (EIA) storage report are beginning to coalesce around the upper 90 Bcf area and “are running somewhat below out model’s 104 Bcf estimate…with competing estimates centering more in the 95-100 Bcf range,” said Tim Evans of Citi Futures Perspective. “Even at the lower level, the refill would still look at least somewhat bearish compared with the five-year average.”

By the end of the traditional injection season Evans sees the year-on-five-year surplus ballooning out to 211 Bcf and “with the less supportive temperature outlook, we also see somewhat higher injections than a day ago for the last week of the month,” he said.

The increase to 211 Bcf would be “normally bearish for prices over the intermediate term; we continue to view the market as conservatively valued and sufficiently oversold that we expect the downside to prove limited. In fact, we think the market could well tread water quietly in the near term before staging a short-covering rally at the first sign of cold.”

Evans is looking to enter the market on a buy stop at $2.65 as the entry to a long position in December futures, then utilizing stop protection at $2.37 to limit risk on the trade.

In overnight Globex trading November crude oil gained 2 cents to $46.68/bbl and November RBOB gasoline rose a penny to $1.3262/gal.