September natural gas is expected to open 2 cents lower Wednesday morning at $2.80 as traders factor in an ongoing cooling trend in near-term weather forecasts. Overnight oil markets were narrowly mixed.

Weather forecasters are calling for still cooler temperatures in key Midwest and eastern markets. “The forecast features cooler changes versus the previous outlook from the Midwest to the East, which comes with rounds of Canadian high pressure intruding into the northern tier,” said MDA Weather Services in its morning six- to 10-day report to clients.

It cautioned that still cooler risks are noted from the models as well, with the risk for more intense below normal coverage seen from parts of Texas to the Mid-Atlantic and Northeast in a stormy regime. “Above normal temperatures will be most steady in coverage along the West Coast, including near much aboves in the Pacific Northwest where temperatures are not expected to reach the record levels seen in the nearer term.”

The market’s inability to follow through Tuesday following Monday’s plunge may be due to short covering, according to one analyst. “The market may be attracting a modest flow of short covering ahead of Thursday’s DOE storage report, with early estimates suggesting a consensus developing at 22 Bcf in net injections for the week ended July 28, a modest step up from the 17 Bcf refill in the prior week but still supportive to the 44 Bcf five-year average gain,” said Tim Evans of Citi Futures Perspective in closing comments Tuesday.

“While arguably less supportive than last week’s scenario, we note that a declining surplus still confirms the market is becoming at least somewhat tighter physically on a seasonally adjusted basis.”

Evans is looking to go long September futures on a buy stop at $3.02, and if the trade is executed, he suggests stop loss protection at $2.84.

The Desk in its Early View survey of storage for the week ended July 28 revealed an average 23 Bcf from a survey of 13 traders. Last year 3 Bcf were withdrawn and the five-year average is for a 44 Bcf injection.

The range on the survey was +15 Bcf to +32 Bcf.

In overnight Globex trading September crude oil remained largely unchanged at $49.17/bbl and September RBOB gasoline fell fractionally to $1.6568/gal.