With traders unswayed by somewhat warmer weather trends overnight, natural gas futures were trading close to even early Wednesday. The July Nymex contract was unchanged at $1.767/MMBtu at around 8:40 a.m. ET.

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The major weather models both advertised “a little more heat” by showing cooling arriving more slowly into the East later this month, according to Bespoke Weather Services.

“This change appears to be in response to lower projected global angular momentum (more of a La Nina flavor in the atmosphere) in the 11-15 day period,” Bespoke said. “The nearer term forecast remains basically the same, with a cooler period Friday through Tuesday in the eastern U.S. before some heat starts to return as we move into the middle of next week.

“While we haven’t seen extreme heat in regions important to the natural gas market, it is still enough to rack up substantial” gas-weighted degree day (GWDD) totals for June overall, the forecaster added. So far June is “on pace to rival 2018 and 2016 for the highest June GWDD count since June 2011, notable given the tendency for hotter summers over the last 10 to 15 years.”

Meanwhile, on the exports front, analysts at Tudor, Pickering, Holt & Co. (TPH) are projecting 45% capacity utilization at U.S. liquefied natural gas (LNG) export terminals through the third quarter, describing this as the “magic number” needed to balance the global gas markets and keep European storage within capacity.

“Global LNG trade for May was about 7% above our forecast, led by continued strength out of China and above forecasted European flows, which continue to push storage higher,” the TPH analysts said. “Chinese demand appears to be fully back and then some, up 10% month/month and 25% year/year, driven largely by swapping of cheaper LNG volumes in place of pipeline imports, which were down 20% year/year.”

Flows into Europe increased about 17% year/year during May even with the Covid-19 pandemic destroying demand, the TPH team said.

“However, given depressed demand, elevated imports drove larger injections into storage, which is currently 18% ahead of last year’s level and at 75% of capacity,” they said.

July crude oil futures were up a penny to $38.20/bbl at around 8:40 a.m. ET, while July RBOB gasoline was up about 1.6 cents to $1.2109/gal.