August natural gas is seen opening unchanged Wednesday morning at $2.83 as hefty production and unsupportive weather prove insufficient to take prices lower. Overnight oil markets fell.

Lower 48 gas production keeps increasing. One of the arguments to the bullish case is for a cessation in the rate of growth of production, but for the moment that doesn't seem to be the case. Tuesday the Energy Information Administration (EIA) in a new expanded format reported April gross production of 82.05 Bcf/d, up a stout 0.9% from March and 7.1% higher than a year earlier.

"The only somewhat supportive aspect to the data is the possibility that production peaked for the current cycle in December. We continue to look for slowing year-on-year production growth and stronger power sector demand to help rebalance the natural gas market of the next few months," said Tim Evans of Citi Futures Perspective in closing comments to clients.

Gas buyers tasked with procuring supplies for power generation across the MISO footprint may have to dig a little deeper going into the holiday weekend as forecasters are calling for tempered wind generation. WSI Corp. in its morning report said, "A trailing frontal boundary will tend to limit showers and storms into the Ohio Valley and lower Mississippi Valley during the end of the week into the weekend. Meanwhile, partly sunny skies and a warming trend are expected across the remainder of the power pool, though an isolated shower or storm cannot be ruled out. Temperatures might rebound in the upper 70s and 80s.

"A cold front may begin to slide into the Northern Plains and Upper Mid West late Sunday with rain and storms, [and] despite the active pattern, wind generation will likely be changeable and relatively light during the remainder of the week into Saturday. Output will vary between 1-3 GW. An increasing southerly flow ahead of a cold front will likely cause wind gen to increase Saturday night through Sunday."

In a weekly report, Walter Zimmermann of United ICAP suggested that "[natural gas] does not look like a market poised to fall to new lows. One big question for the coming weeks is whether natgas can congest itself above the down trend resistance line from the $6.493 high." That would require a weekly settlement over $3, according to figures.

In overnight Globex trading August crude oil fell 87 cents to $58.60/bbl and August RBOB skidded 2 cents to $2.0276/gal.