November natural gas futures were trading slightly lower shortly before 9 a.m. ET Tuesday, down 1.3 cents to $3.229/MMBtu, as weather-driven demand expectations for the next two weeks backed off slightly overnight.

After forecasts showing a series of cold blasts into the Midwest and East for the back half of October helped rally the market Monday, overnight weather models lost some demand based on the timing of a break between cold shots around Oct. 26, according to NatGasWeather.

“It’s still a solidly cooler than normal pattern with a steady stream of weather systems dropping out of Canada and into the northern, central and eastern U.S., just with brief milder breaks between systems, such as late this week and again late next week,” NatGasWeather said. “…Bigger picture, the pattern is still rather bullish unless there were to be further milder trends in the days ahead. With deficits already impressive and set to increase further to over 650 Bcf once the coming series of weather systems and cold shots sweep through, the background state remains bullish.

“We see this putting heavy pressure on record production finally reducing deficits. Until that happens, moderate sell-offs are likely to continue finding buyers.”

Energy Aspects said it is expecting an end-October carryout for Lower 48 working natural gas inventories of just under 3.2 Tcf.

“Based on 10-year normal weather, our balances include injection activity through the week ending Nov. 16,” the consulting firm said. “Salt storage inventories could turn their facilities in November in anticipation of some netback before peak demand days. Consequently, injection activity could be seen through the week ending Nov. 23 on a net basis, but peak stocks would still trend below 3.23-3.24 Tcf before withdrawals begin.

“At such a low level, cash will remain supported — even if demand finally has a late storage season wane — given many physical participants are willing to buy gas to direct into storage rather than worry about any potential ratchet-induced pricing later in the heating season on low stocks,” Energy Aspects said.

Looking at the technicals, ICAP Technical Analysis analyst Brian LaRose took a neutral outlook following Monday’s rally.

“With the bears failing to push natural gas beneath $3.166-3.146-3.133 we are forced to take up a more neutral stance,” LaRose said. “Bears need a decisive break beneath this area of contention to set a deeper retracement of the $2.752-3.368 advance in motion. Bulls need to punch through $3.368 to open room up to $3.419-3.494 next. In a holding pattern until resistance can be exceeded or support can be broken.”

November crude oil was trading 45 cents lower at $71.33/bbl shortly before 9 a.m. ET, while November RBOB gasoline was down fractionally to $1.9431/gal.