August natural gas is called unchanged Thursday morning at $2.69 as traders await government supply statistics that are likely to cite increases above long-term averages. Overnight oil markets rose.

Analysts cite a lack of demand leading to an expected oversized storage injection Thursday. Last year a stout 94 Bcf was injected and the five-year pace stands at 75 Bcf. Consensus estimates are in the mid-80 Bcf range, and Bentek Energy predicts an 88 Bcf build utilizing its flow model and said the number could go even higher due to the holiday. “Demand in the U.S. fell 2 Bcf/d from the previous week, largely due to power burn demand as temperatures fell in the eastern half of the country,” the firm said.

“Furthermore, even though the week technically did not contain a holiday, the large injections during the week indicate that there is some high-side risk to this week’s forecast due to potential impact from the holiday week. The lower demand levels allowed more gas to move into storage, especially in the East and Producing regions. Total sample injections within the Producing Region picked up significantly compared to the previous week, which was concentrated in Bentek’s sample of salt dome facilities. Sample injections within the region increased more than 200% compared to the previous week. The region is expected to announce a relatively strong injection for the week, which will likely continue to push inventories within the salt dome facilities toward all-time highs.

Other estimates of Thursday’s Energy Information Administration storage report include ICAP Energy at 86 Bcf and IAF Advisors looking for an 84 Bcf build. A Reuters survey of 23 traders and analysts revealed a sample mean of 86 Bcf with a range of 79 Bcf to 93 Bcf.

Longer-term analysis suggests, however, that demand will have to increase substantially to rebalance the market. In a Thursday morning report RBN Energy said, “With about 127 days between June 26 and the end of the theoretical injection season on Oct. 31, gas demand would need to continue exceeding 2014 demand by 5 Bcf/d or more for the entire period to drop inventories back down to last year’s level.

“But while the hottest months are still ahead, air conditioning use is likely to decline during the fall ‘shoulder’ months. That could bloat storage injections again and leave a surplus going into the gas winter season at the end of October, especially if there are no further production slowdowns.”

Despite recent weakness, long-term market technicians are undeterred in their longer-term bullish outlook. Analysts at United ICAP cite numerous wave count and retracement support levels. “Given the widespread support, our strategy remains unchanged, we prefer to be scale-down buyers (in Q4 2015 and Q1 2016 only) with a protective sell stop beneath $2.406,” said Brian LaRose, a market technician with the firm.

In overnight Globex trading August crude oil rose $1.16 to $52.98/bbl and August RBOB rose 2 cents to $2.0085/gal.