July natural gas is set to open a penny higher Thursday as analyst figures show a shrinking long-term storage surplus by the end of the month. Overnight oil markets fell.

More deferred weather models continue to hold to a pattern of above normal temperatures. “The themes of the forecast remain consistent with previous expectations as above normal temperatures take focus in the Central United States,” said MDA Weather Services in its morning 11- to 15-day outlook. “This is supported by the background” Madden Julian Oscillation “in phases 1 and 2, phases which also promote pattern variability along the East Coast.

“The forecast averages the period near normal in the East, but with opportunity for aboves to spill into the region in the mid-period. While recent weakening in” Atmospheric Angular Momentum, a measure of how fast the atmosphere is spinning relative to the Earth’s rotation, “is also supportive of these warmer forecast themes, confidence remains low in the details given poor model skill and differing model solutions as it relates to the progression of the pattern.”

Present natural gas inventory levels stand at 2,631 Bcf, 237 Bcf greater than the five-year average. If Thursday’s estimates of the Energy Information Administration (EIA) storage report are correct, that is likely to hold, but going forward analysts see a diminishing surplus. ION Energy expects a build of 86 Bcf. A Reuters survey of 28 traders and analysts revealed a sample mean of 86 Bcf with a range of +77 Bcf to +94 Bcf.

Somewhat of an outlier, Tim Evans of Citi Futures Perspective calculates a 91 Bcf build. “With prices continuing to decline even as the temperature forecast trends warmer, we see some potential for a buy-the-news reaction to Thursday’s storage report as the market pivots from looking back at the neutral data for last week toward what should be smaller storage refills with more bullish comparisons in the weeks ahead.”

By June 30 Evans’ figures show a year-on-five-year storage surplus of 182 Bcf.

In overnight Globex trading July crude oil fell 22 cents to $44.51/bbl and July RBOB gasoline dropped 2 cents to $1.4137/gal.