July natural gas is expected to open 6 cents higher Wednesday morning at $2.91 as weather forecasters were expecting a more extended period of heat to prevail in the Southeast. Overnight oil markets vaulted higher.

Weather forecasts overnight were calling for a duel between cooler Canadian air and resilient heat in the Southeast. Natgasweather.com in its Wednesday morning report said, "We now view longer-term weather patterns as trending slightly warmer as well. This is besides when Canadian weather systems track into the northern U.S. with showers, thunderstorms and slight cooling.

"But what's different with the coming pattern compared to previous months is high pressure over the southern and eastern U.S. will hold strong and should be difficult to budge by approaching Canadian weather systems. Therefore, we still expect the South, Southeast and up through the Mid-Atlantic Coast to remain very warm, likely into the start of the last week of June."

Consensus thinking is that upcoming heat will lessen storage builds going forward, but if analyst projections are correct, upcoming injections will not be as great as last year, but well ahead of the five-year pace.

"Expectations that increased summer heating demand will mean smaller storage injections in the weeks ahead continued to help support the price recovery, along with a specific weather forecast that has trended warmer since last week," said Tim Evans, an analyst at Citi Futures Perspective.

Others put Tuesday's rise in simpler terms. "We are still in a range," said a New York floor trader. "We bounced off the low end of the range a couple of days ago, and now it's just working its way back to the upper end. We are in the upper-middle portion of the range, and maybe it has another leg up tomorrow, and we'll see how it acts once it reaches the $3 area. I don't see anything that's going to justify its movement [past $3]. It's a little warmer, but still open-window weather. This is still sideways market movement."

Evans' figures show the range of injections for the next four weeks between 90 and 115 Bcf. The five-year average ranges from 74 Bcf to 89 Bcf. By June 26 Evans has the year-on-five-year surplus currently at 22 Bcf up to 87 Bcf. For Thursday's inventory report he expects a 115 Bcf increase.

"This still shows the market becoming better supplied on a seasonally adjusted basis, but at least represents less of a headwind than the prior scenario," he said. Evans recommends standing aside the market pending identification of a low-risk entry.

In overnight Globex trading July crude oil surged $1.52 to $61.66/bbl and July RBOB gasoline gained 4 cents to $2.1158/gal.