May natural gas is set to open 2 cents lower Tuesday morning at $3.14 as weather forecasts remain mild and the technical picture weakens. Overnight oil markets fell.

In a Tuesday morning report to clients WSI Corp. said, “The latest 11-15 day period forecast is a little warmer than yesterday’s forecast over the East but a bit cooler across the Rockies and central U.S. CONUS GWHDDs are down 1.8 for days 11-14 and are forecast to be 20 for the whole period, which are 21.7 below average. CONUS PWCDDs are 14.4.

“Forecast confidence is a little lower than average as there is model spread, inherent uncertainty and plenty of moving parts with the hemispheric pattern throughout the two medium-range periods.”

Analysts don’t see the market reacting to lower production and forecasts of a warm summer just yet. “Although we view some of this week’s selloff as related to bearish spillover from the petroleum futures, we are maintaining a trading theme of recent weeks in which generally mild temperature trends are reducing both HDD and CDD accumulation in the process of maintaining weekly storage injections at around average levels,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning report to clients. “This would help to maintain a supply surplus of around 260-270 Bcf, an overage of approximately 15%. While not a substantial supply cushion, such a stock will be able to dampen any occasional price spikes that might emanate from unexpected pipeline disruptions, additional nuke outages, etc.

“And while some of the longer term weather forecasts across the summer period are beginning to issue warmer than normal expectations, deviations from usual don’t appear severe or broad-based. All in all, this still feels like a market that can draft on down to about the $3.05 level per June futures when stretching an outlook into early next month.”

Market technicians are seeing a weakening outlook and are focused on a higher price threshold. “Starting to look very heavy in technical terms,” said Brian LaRose, an analyst with United ICAP, in closing comments Monday. “However, in price terms bears still have not done enough damage to make a case for a seasonal top being in place. First challenge for the bears will be $3.132.

“Take out last Wednesday’s low and there is immediate room down to $3.060-3.034-3.032 next. Fail to take out $3.132, expect further congestion near the highs.”

In overnight Globex trading May crude oil lost 34 cents to $52.31/bbl and May RBOB gasoline fell 2 cents to $1.7037/gal.