July natural gas was set to open about 4 cents higher Thursday morning as traders contemplated warming forecasts and a potential improvement in cooling demand heading into the weekend.

Natural gas analytics firm Genscape Inc. said in a morning note to clients that it sees “prospects for some demand bumps in coming days, with forecasts calling for above-normal heat, but the timing may limit the demand gains as the most intense heat hits during the weekend.

“Genscape meteorologists are forecasting Lower 48 population-weighted CDDs [cooling degree days] to run above normal through Sunday. CDDs are expected to peak Saturday at 75.6 CDDs versus the normal of 55.2 CDDs. Temperatures next week are once again expected to retreat to cooler than normal.”

Genscape said its models anticipate 56.3 Bcf/d of demand in the Lower 48 on Friday from the residential, commercial, industrial and power sectors.

The overnight gains in the July contract followed a two-day, 21-cent drop.

Earlier this week, July took out a critical $3.20/MMBtu support level and kept going, with seemingly few takers looking to buy the dip, Powerhouse’s David Thompson, executive vice president of the Washington, DC-based energy brokerage firm, told NGI.

Continuing cooler-than-expected forecasts could push July below the $3 threshold and into $2.88-2.90 territory, Thompson said.

With traders preparing to digest a weekly storage injection figure that’s expected to fall roughly in line with last year but below the five-year average, it’s the weather that’s been the focus of a market anxious to transition into the summer cooling season.

“The forecasts see a small warm adjustment from the Southwest to the Rockies, a result of an eastward shift in the upper air pattern as troughing further deepens over the Gulf of Alaska and lends pattern variability into the Pacific Northwest,” MDA Weather Services said in a morning note to clients. “…More widespread and intense aboves are focused farther east in the Interior West and Rockies. Below normal temperatures remain favored in the East, where models continue to differ in the intensity and coverage of the cooler anomalies.”

Analysts weren’t expecting anything too dramatic from Thursday’s storage injection report, set for a 10:30 a.m. EDT release by the Energy Information Administration.

A Bloomberg survey predicted an injection ranging from 66 to 78 Bcf with a median build of 69 Bcf for the week ended May 26. IAF Advisors called for a 73 Bcf injection, while Stephen Smith Energy Associates revised upward its weekly gas outlook estimate to call for a 79 Bcf build. A Reuters survey called for an injection ranging from 73 to 86 Bcf. Last year’s injection was 80 Bcf, while the five-year average stands at 97 Bcf.