August natural gas is expected to open 3 cents lower Tuesday morning at $2.78 as traders see marginally cooler trends in near-term weather forecasts and maintain a bearish posture. Overnight oil markets rose, and equity markets recovered somewhat from Monday's free-fall.

Analysts see both bulls and bears becoming frustrated with a market that seems locked in a trading range. "This market could test the patience of both the bulls and the bears for a couple of sessions given near-neutral indications from the temperature factor and lack of significant impetus from the supply side of the equation," said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients. "Although some warming in weather trends is anticipated next week along much of the eastern seaboard, this factor is being more than offset by cool trends across much of the nation's Midcontinent.

"As a result, some much above normal supply injections would appear likely across most of the July EIA [Energy Information Administration] releases. With the demand side of the equation offering limited impetus, supply side items will likely determine how the market finishes this week. To the extent that Thursday's reported injection is unlikely to stray far from normal builds, we won't expect much response as both buyers and sellers will be reluctant to take a sizable position into a holiday weekend that could bring some significant shifts to the temperature forecasts."

Ritterbusch is maintaining a bearish outlook and said, "we suggest holding any short August holdings. But we will caution against additional shorts until chart support at the 2.73 level is violated."

MDA Weather Services in its Tuesday morning six- to 10-day outlook said, " The forecast trends cooler in this period as ridging builds more strongly into the Gulf of Alaska. While this feature leaves most states west of the Rockies on the hot side of normal (including much aboves on average in the Pacific Northwest), downstream cooling results in a period with near and slightly below normal temperatures from the Midwest to the East. The coolest conditions are forecast in the second half of the period in the Midcontinent, although unsettled conditions in the eastern half presents some volatilities and risk to the day to day details."

MDA cautioned that "model volatility in this lead time as well as a Canadian air mass into the North Central U.S., which could yield cooler conditions at mid-period limits confidence in the details."

Tom Saal, vice president at FC Stone Latin America LLC in Miami, in his work with Market Profile expects the market to test Monday's value area at $2.830 to $2.800. "Maybe" the market will test $2.724 to $2.698, he said in a Tuesday morning note to clients.

In overnight Globex trading August crude oil added 19 cents to $58.52/bbl and August RBOB rose a penny to $2.0156/gal.