July natural gas prices were set to open 4 cents higher at $3.005 as heat remained the dominant force in trading action even after Thursday’s surprise storage report.

The Nymex July futures contract traded as low as $2.966 and crossed the $3 threshold in overnight trading and again just before the open. Weather models late Thursday and early Friday called for more intense heat in the long range, even as it showed slightly cooler trends in the medium term.

In fact, weather patterns could remain in a warm phase until the second week of July, delaying the arrival of cooler weather, according to EBW Analytics. The firm noted, however, that Friday morning’s weather forecast does not materially change the picture, adding just 1.2 cooling degree days (CDD) and 1.5 Bcf of demand.

Thursday’s “trading action suggests that bulls are not ready to quit and will try to push prices higher. If current forecasts hold, however, natural gas prices are likely to starting moving lower again soon,” EBW said.

Indeed, heat is forecast to peak on Monday across the country, but it “quickly falls off from there as high-confidence cooling arrives,” Bespoke Weather Services said. From there into week 3, however, forecasts should only trend hotter, with week 3 heat now increasingly high confidence.

July natural gas prices continued marching higher overnight following an extremely strong strip to end Thursday despite a bearish miss on the Energy Information Administration’s (EIA) storage inventory report.

The EIA reported a 96 Bcf build into inventories for the week ending June 8. The reported build was considerably higher than even the most bearish of expectations.

Market consensus was around a build in the upper-80 Bcf range. EBW favored a slightly smaller build, while Bespoke projected a 90 Bcf injection. Kyle Cooper of ION Energy Services expected a 93 Bcf build, and a Bloomberg survey had a range of 82-95 Bcf, with a median expectation of 90 Bcf. A Reuters poll also had a range of 82-95 Bcf, with a median expectation of 90 Bcf.

As of June 8, storage inventories stood at 1,913 Bcf, 785 Bcf below last year at this time and 507 Bcf below the five-year average of 2,420 Bcf.

“Any reversal off EIA data tends to be a strong technical signal for a continued move in that direction, but prices are now running into strong resistance at the top of this $2.97-3.00 range,” Bespoke analyst Jacob Meisel said.

Production has been limited by maintenance, and that has kept cash strong as well, so prices very well may be able to break above and test $3.02 or $3.05 off any cash strength on Friday morning. That said, weather-adjusted power burns have not tightened, and the market is facing another decently large injection next week, he said.

“Once production returns, balances should soften even more, though clearly storage concerns are driving this market. The deciding factor will ultimately be the weather, and we see medium-term cool trends still setting up short-term downside that becomes a strong buying opportunity once long-range heat arrives,” Meisel said.

Crude oil futures were trading 19 cents lower at $66.70, and RBOB Gasoline futures were trading 1.7 cents lower at $2.074.