July natural gas opened 2 cents lower Thursday morning at $2.83 as traders anticipate that a government report will show natural gas storage inventories increasing at a rate well above historical averages in spite of record power usage. Overnight oil markets rose.

The 10:30 a.m. EDT release of storage figures will give traders an idea of just how much impact last week's sweltering heat in the East and Midwest had on the supply demand landscape. Figures suggest it was record usage, but not enough to keep estimated storage builds less than the five year average.

Industry consultant Bentek Energy calculated that "Total demand picked up considerably compared to the previous week, gaining more than 3 Bcf/d, which was driven entirely by higher power burn demand. During the week, power burn hit a 2015 high of 31.4 Bcf/d, and this now sets the record for the earliest time of year where power burn has hit above 31 Bcf/d."

Market wise recent price action has been a trial for both bulls and bears with neither gaining the upper hand. "This market continues to frustrate both the bulls and the bears as follow through in either direction remains elusive with supply/usage relatively balanced at the present time. The storage surplus against 5 year average levels remains modest at only about 45 bcf with negligible expansion expected out of today's EIA report,"said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients.

"We expect a bullish figure this morning that could force a quick re-test of yesterday's highs should the supply increase fall short of our expected 87 bcf upswing. But, current temperature forecasts don't appear accommodative toward a $3 price handle. While some exogenous factors such as a pipeline disruption, unplanned nuclear down time, further maintenance, etc., can always enter the fray in forcing values higher than expected, we feel that continued year over year production gains will be a limiter on further price advances to above the $3 mark."

Last year 112 Bcf was injected and the five-year pace stands at 86 Bcf. Citi Futures Perspective calculates a 101 Bcf build while IAF Advisors is looking for a 93 Bcf increase. A Reuters poll of 25 traders and analysts showed an average 93 Bcf with a range of 85 Bcf to 104 Bcf.

Next week Reuters data shows an 83 Bcf build with a range of 69 Bcf to 92 Bcf.