October natural gas is set to open 5 cents higher Wednesday morning at $2.96 as traders discount moderating weather patterns and focus on a re-emergent bullish technical environment. Overnight oil markets eased.

Forecasters in their noon updates Tuesday didn’t see any significant changes, and “we continue to expect temperatures to play out relatively bearish over the next few weeks with larger builds to come, although still lighter than five-year averages,” said Natgasweather.com. “Specifically, the northern U.S. will remain slightly warmer than normal, which for this time of the year means comfortable daytime high temperatures of 70s to lower 80s, requiring limited demand for heating or cooling.

“There will still be weather systems tracking across the northern U.S. every few days, such as the current one sweeping through the Midwest, with additional ones late this coming weekend and again late next week. This will keep temperatures over the northern U.S. from getting too hot or cool. However, it will remain warm over the southern U.S., and at times up along the Mid-Atlantic Coast, where highs of mid-80s to lower 90s are expected, thereby driving a majority of upcoming national natgas demand.”

Risk managers are looking lower. “We still believe as we approach the end of the cooling season, we anticipate a sideways to lower trade over the next three to four weeks,” said Mike DeVooght, president of DEVO Capital Management, in a weekly note to clients. “On a trading basis, we will continue to use rallies approaching the $3 level on the spot market as an opportunity to establish producer collars with floors in the $2.50-2.75 range and a ceiling around the $4.00 level.”

Market technicians see the bulls on the cusp of energizing the bullish case. Spot futures haven’t seen the daylight of a $3 print since May of last year. “Only one way to revitalize the bullish model, clear both the $2.943/2.998 highs and the 3.039-3.085 zone,” said Brian LaRose, a market technician with United ICAP. “Make that happen and we will need to entertain a march to $3.680, even $4.955.

“But unless the rest of the petro complex is heading higher, we are skeptical the bulls can pull off such a feat. Still looking for another leg down to the $2.500 neighborhood if the bulls cannot get the job done.”

In overnight Globex trading October crude oil fell 23 cents to $44.67/bbl and October RBOB gasoline fell dropped a penny to $1.3411/gal.