September natural gas is expected to open 4 cents higher Wednesday morning at $2.88 as weather traders see a short-term bullish move. Overnight oil markets rose.

Overnight weather models turned warmer. In its morning outlook WSI Corp. said, “The latest six-10 day period forecast is warmer than yesterday’s forecast across the Northeast and Ohio Valley, as well as the West Coast. The Rockies and Plains are a bit cooler. Period PWCDDs are up 1.6 to 58.6 for the CONUS. Forecast confidence has improved and is about average today. Medium-range models have come into much better agreement with the large scale pattern, but there are still technical and timing differences.

“There is a cooler risk across the Rockies and central U.S. The West Coast, Southwest and even the East have a small upside risk.”

Weather trader Bespoke Weather Services is still long September natural gas from Sunday evening. “We maintain our one long position into the evening [Tuesday]. Our natural gas sentiment remains slightly bullish as we expect positive price action to carry over into the day [Wednesday].

“We saw yet another mid-day reversal in natural gas prices [Tuesday], thanks primarily to bullish runs of the GFS/GFS ensemble guidance mid-day. This was the main catalyst behind the decision to re-establish our long position. This past week, we have noticed trading opportunities have been slightly shorter-term than usual, partially due to increased weather model variability.

“In the past few days we have seen a sharp decline in forecasting accuracy, with only a small bounce back so far,” the firm said. “This is part of why weather model variability is so high.”

Despite the short-term bullish weather outlook, analyst Teri Viswanath, director of commodity strategy at BNP Paribas, sees longer-term moderation eventually settling in. “Despite a slightly warmer weather forecast overnight, the absence of more intense heat and the possibility that western Pacific typhoons might introduce cooler forecast changes, opens the door to lighter power demand ahead this month. Consequently, despite the lull in inventory restocking, there is greater likelihood that the trend in undersized injections will prove short-lived.

“Taking a closer look at the recent interstate pipeline receipts into storage, we expect that the industry likely injected 55 Bcf into storage for the week ending Aug. 7th. This compares to the 79 Bcf injection reported last year and the 48 Bcf five-year average build. For the current week ending Aug. 14th, the initial storage receipts suggests a slightly heavier 60 Bcf build in working gas in storage.

“With the market remaining acutely focused on how the current supply surplus will ultimately resolve itself, we expect that prices will continue to deteriorate until finding a backstop with the start of winter heating demand.”

In overnight Globex trading September crude oil rose 45 cents to $43.53/bbl and September RBOB gasoline added 2 cents to $1.7176/gal.