The expiring July natural gas is expected to open 3 cents higher Wednesday morning at $3.06 as traders hone in on new weather data reinforcing warmer trends. Overnight oil markets weakened.

Overnight weather models turned a touch warmer. “The six- to 10-day forecast is generally warmer than yesterday’s forecast, favoring the northern half of the continental United States,” said forecaster WSI Corp. in a morning report to clients. Continental United States population-weighted cooling degree days (CDD) “are up 1.3 to 60.1, which are 9.5 above average.”

WSI cautioned that “model spread and rain risks offer risks in either direction over parts of the lower Midwest into the eastern US. The interior West, Plains and Midwest could run warmer late in the period.”

Near term forecasts of cooling load show a warmer New England and cooler Mid-Atlantic and Midwest. The National Weather Service (NWS) for the week ended July 1 estimated that New England would see 39 cooling degree days (CDD) or 12 greater than normal, and New York, New Jersey and Pennsylvania would experience 37 CDD or 4 less than its average. The greater Midwest from Ohio to Wisconsin was anticipated to endure 31 CDD or 14 less than its seasonal norm.

Analysts see the market up against seasonal headwinds. “The seasonal pattern says don’t fall in love with the upside here,” Walter Zimmermann of United ICAP told NGI.

“The seasonal risk is lower, and what’s behind that is going from the winter into the spring people are buying up the market in anticipation of summer demand. You get the winter to spring pre-season rally, like we had this time around from $2.52 to $3.43, and then the market sold off a little bit.

“The bulls are now looking for heat waves and hurricanes, but the problem with that is that is what the pre-season rally has already done. The bulls get disappointed and are forced to liquidate their length as the summer unfolds. Bulls end up buying into a market that has already discounted summer demand.

“If the market could break $3.20, that would break the pattern, but if you get to $3.21 all you have done is break the ongoing .618 retracement pattern. We could have a little upside correction, but this is not the time to fall in love with the upside,” said Zimmermann.

In overnight Globex trading August crude oil dropped 24 cents to $44.00/bbl and August RBOB gasoline fell a penny to $1.4414/gal.