July natural gas prices were set to open 2.4 cents higher at $2.963 Wednesday morning as slightly warmer trends showed up in the latest weather data.

The Nymex July futures contract dipped overnight but weather models added cooling degree days (CDD) through the next 15 days, with hotter trends both in the short-term focused on June 18-19 and the long-term focused around June 25, according to Bespoke Weather Services.

In between, Bespoke continues to watch modest cold risks as there is an upstream weather system that could favor more western ridging and a weak eastern trough to limit heat. “There are risks that this afternoon we trend cooler in the medium-range,” however, into the long-range, the bias should remain to the hotter side, Bespoke said.

NatGasWeather forecasters, meanwhile, expect the hot upper ridge to gain strength June 24-28, which would result in highs of 90s and 100s expanding over most of the south-central United States, with also some coverage of 90s into portions of the northern part of the country.

“What remains at issue is exactly how much of the Midwest and East will see highs of 90s during the last week of June, as the data struggles to resolve exactly where the core of the heat dome will set up.” Weather models currently favor a little more of the west-central United States instead of the east-central part of the country.

The CDD gains that showed up in overnight weather forecasts, while small, are sufficient for projected CDDs in June to match the all-time record set eight years ago in 2010, according to EBW Analytics.

On an aggregate basis, CDDs are expected to total 57.7 CDDs above normal.

The hotter-than-normal weather is also sufficient to add 70-80 Bcf of demand, and to

eliminate more than half of the decrease in storage versus the five-year average when June began, EBW said.

The Energy Information Administration (EIA) will release its weekly storage inventory report on Thursday, with market estimates so far calling for a build of 86-94 Bcf, in line with the five-year average of a 91 Bcf build. EBW is projecting a build of 93 Bcf, and Bespoke is expecting a 90 Bcf injection.

Natural gas inventory reports during the next several weeks have the potential to move regional markets with a shifting trend in northern versus southern storage builds, and increased tropical activity should ignite the debate between price impacts of supply disruptions versus precipitation-driven demand losses, Mobius Risk Group said.

At present, Hurricane Bud, the second named storm of the 2018 Atlantic hurricane season, is off the coast of Manzanillo and likely disrupting the ability to import liquefied natural gas cargos into Mexico’s west coast. While Bud has been reduced to a Category 3 storm, with further deterioration expected as it approached Los Cabos, the potential for demand destruction in northwestern Mexico and the U.S. Desert Southwest will remain for the next several days, Mobius said.

Crude oil futures were set to open 42 cents lower at $65.94, and RBOB Gasoline futures were set to open fractionally lower at $2.09.