July natural gas futures are expected to open 3 cents higher Tuesday morning at $3.05 in spite of forecasts calling for current hot weather patterns to lose some of their starch by the end of the week. Overnight oil markets fell.

Weather forecasters see a pattern of near term warmth followed by cooling. “[A] fairly hot pattern will dominate east of the Rockies this week as strong high pressure sets up overhead,” said Natgasweather.com in a noon Monday update. “With highs of upper 80s to lower 90s reaching as far north as Chicago and NYC, nat gas demand will be quite strong. This will be exacerbated by hot conditions over Texas where highs will reach the mid 90s to locally 100s. If it wasn’t for the slightly cooler Southeast, demand would be considered impressive for the week.

“Over the West, a strong late season weather system continues to bring valley rains and mountain snows, while also dropping temperatures 10-25°F below normal. Late in the week, modest cooling will briefly sweep across the Northeast, while most of the rest of the country experiences warm to hot conditions with relatively strong demand for cooling ongoing. Late this coming weekend is when a fast-moving weather system over the Midwest will weaken the upper ridge and advance into the east-central US and where we see cooler trends since last week.”

Analysts see a market not ready for prime time. “[Monday’s] early rally fell short of last week’s highs and the subsequent pullback suggests a market not yet poised for a sustainable price advance,” said Jim Ritterbusch in closing comments Monday. “Weekend updates to the weather forecasts as well as today’s adjustments continue to offer a mixed bag with this week’s hot Midwest temperatures offset by an expected late week moderation across the mid-continent and elsewhere.

“Until Thursday’s weekly storage report is released, some further price consolidation is likely with the range bounded by about $2.97 on the down side and today’s highs on the upside. For now, we suggest holding any long positions as we still see high probability of an advance up into the $3.20-3.25 zone per nearby futures,” he added. “While increasing expectations for a lift in production could limit upside price possibilities, this factor could easily be negated by the first sustainable broad based hot spell. We have suggested raising stop protection to below the $2.97 level on a close only basis in referencing July futures. We are also keeping a hold on long fall 17-short winter 18 bull spreads.”

In overnight Globex trading July crude oil fell 20 cents to $45.88/bbl and July RBOB gasoline shed a penny to $1.4807/gallon.