December natural gas is expected to open 4 cents lower Wednesday morning at $2.94 as traders factor in expected record gas inventories and market exposure over the extended holiday weekend. Overnight oil markets fell.

Weather forecasters continue to wrestle with models unable to show a clear consensus. “Confidence continues to be lower than usual during this period as models struggle with the evolution of the MJO [Madden-Julian Oscillation] and show disagreements in how the U.S. pattern responds to that signal,” said MDA Weather Services in its morning 11-15 day forecast. “This forecast gives consideration to a MJO response out of phases 3-4, but a small colder adjustment is noted in parts of the Eastern Third due to storm-based variability.

“Overall, the period remains warmer than normal per national GWHDD measures with a coverage of aboves spanning from the Midwest to the East. Colder threats are found in the West and supported by a Pacific regime featuring +WPO [Western Pacific Oscillation] and -PNA [Pacific North American] signals. Still warmer risks exist in the Eastern Half, focused ahead of low pressure on day 6 in the Midwest and at mid-period in the East. The West could be colder with more widespread below normal coverage there.

“Risks continue to lie in the colder direction of forecast, with the greatest risk for colder versus forecast being in the West. The colder risk is seen in the East as well, but models are split there.”

The noon release of storage data is expected to show another bin-busting record level of working gas inventory. Inventories currently stand at 4,047 Bcf and Wednesday’s report is expected to add another layer on top of that. IAF Advisors calculates a 6 Bcf increase, and Ritterbusch and Associates estimates a 7 Bcf build. A Reuters sample of 19 traders and analysts showed an average 5 Bcf with a range of -1 Bcf to +15 Bcf.

Tim Evans of Citi Futures Perspective is estimating a build of 11 Bcf, and estimates a 214 Bcf surplus year-on-five-year by December 9. “[I]f the cooler temperatures in the 11-15 day forecast carry over into the following weeks, this outlook gives prices a chance to work higher, with a retest of the $3.366 spot high reached in October as one possible objective.”

In overnight Globex trading, January crude oil fell 36 cents to $47.67/bbl and January RBOB gasoline fell a penny to $1.4004/gal.