March natural gas is set to open 7 cents lower Monday morning at $2.96 as weather models over the weekend turned sharply warmer near term and forecast heating requirements were slashed. Overnight oil markets fell.

According to Commodity Weather Group, “massive warmer changes over the weekend were compounded overnight when the European guidance lost about 10 more national heating degree days [HDD]. Even the warmest guidance saw double-digit national HDD losses compared to Friday as a massive warm surge in the pattern dominates the six-10 day range with the Midwest bearing the brunt of the well below normal heating demand expectations.

“The East Coast sees warmer adjustments too, but not nearly as strong as the Midwest. Some very slight colder change offsets are noted for the Midwest to East Coast in the one-five day range and the West is colder in the 11-15 day with some of that expanding to the Midcontinent late,” said Matt Rogers, president of the firm.

Harrison, NY-based Bespoke Weather Services sees somewhat less warmth, but not much. “We do see a bit of bullish risk on model guidance in the 11-15 day timeframe, but right now it is only shown on international model guidance by days 13-15 and we have seen that bullish risk frequently disappear as it moves closer to verification. Additionally, some colder trends near the end of February will not increase demand quite as much as they would near the end of January…” the firm said in a Monday morning report.

It’s all about the weather, say risk managers. “The gas market is going to continue to be sensitive to weather over the next two months,” said Mike DeVooght, president of DEVO Capital Management. “If we continue to see warmer than normal temperatures, we will see gas trade below $3.00 in the near future. If temperature forecasts turn colder than normal, we could easily see gas test the $3.40-3.50 level.

“Looking forward into mid 2017-early 2018, we feel the gas market is going to have a difficult time holding above the mid $3 range as take away capacity out of the Marcellus and Utica expands,” he said in a weekend report to clients.

In overnight Globex trading March crude oil dropped 43 cents to $53.43/bbl and March RBOB gasoline shed 2 cents to $1.5686/gal.