May natural gas is expected to open 2 cents higher Thursday morning at $1.93 as traders juggle a mix of short-term cooler weather along with a government report that is expected to show storage reaching an all-time high on a seasonal basis. Overnight oil markets were mixed.

Thursday’s Energy Information Administration (EIA) storage report in all likelihood will put storage at the highest point ever for this time of year. Inventories currently stand at 2,468 Bcf, and last year 6 Bcf was injected, yet the five-year average is for a 19 Bcf pull. Ritterbusch and Associates calculates a 4 Bcf increase, and industry consultant Bentek Energy is looking for a 12 Bcf build. A Reuters survey of 20 traders and analysts revealed an average 8 Bcf with a range of +4 to +30 Bcf.

Tim Evans of Citi Futures Perspective forecasts a build of 13 Bcf, and if his data is correct, the current year-on-five-year surplus of 843 Bcf would fall to 799 Bcf by April 15. “With the surplus ending the forecast period at a lower level than it started, we see this as confirming the market will become at least somewhat tighter on a seasonally adjusted basis than it has been. This gives the market at least a chance to move higher, although it may not be enough to wedge the price above $2.00.”

Forecasters are calling for another round of cold and snow to invade eastern and Midwest population centers. According to meteorologists, “A new plunge of cold air will produce snow showers in some parts of the Midwestern and Northeastern states and accumulating snow in others this week and into the weekend. In come cases the cold air will rival that of nights early in the week, including parts of the interior South.

“The air will be cold enough to allow showers to fall as a mix of rain, ice and snow in some areas and mostly snow in others. Intertwined with the wintry showers of varying intensity will be a storm system that arrives on the scene after the showery pattern has commenced. The storm rotating through the cold air invasion could bring a period of steady snow to parts of the Midwest and Northeast,” said meteorologist Elliot Abrams.

At least one consulting firm is looking for a second half recovery. PIRA Energy said its “bullish price outlook has been tempered by the collapse of gas-weighted heating degree days and the related inflation of end-March storage. During 2Q, the approximately 1 Tcf year-on-year storage surplus should ultimately limit [price] recovery. An end-March exit of approximately 2.5 Tcf will mandate approximately 40% less year-on-year net injections.

“Unlike 2012, when electric generation gains from coal to gas curbed injections, the 2016 remedy will be more back-loaded, tied to declining production and stronger non-electric generation demand. Indeed, PIRA has maintained a bullish post-2Q Henry Hub price posture from expected structurally corrective factors gradually taking firmer control of the market.”

In overnight Globex trading May crude oil fell 9 cents to $36.66/bbl and May RBOB gasoline rose fractionally to $1.3972/gal.