July natural gas opened 3 cents lower Friday morning at $2.67 as traders factor in a somewhat more relaxed temperature outlook but remain wary of any weekend surprises. Overnight oil markets fell as Britain voted to exit the European Union.

Top traders are sitting tight as the market consolidates. "From a technical perspective, we will await a close to below the $2.65 mark before expecting any significant downside price follow through," said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients. "This week's stall in the strong spring price advance has resulted largely from a significant shift in the short term temperature views that have been mainly featured by a significant cool down next week across a broad portion of the US mid-continent."

"But, while this could force a storage increase toward normal levels next month, the market may still need to deal with another downsized injection next Thursday that could easily fall some 10 Bcf below [Thursday's] reported upswing. All in all, we remain in a neutral camp for now as we still see a possible renewed advance toward the $2.80 mark should weekend updates to the short term temperature views suggest a renewed hot spell across the Midwest."

Gas buyers across the broad MISO footprint tasked with procuring gas for weekend power generation will be faced with high power demand, but at the same time have wind generation available as well. "A Heat Alert is in effect, [and] a return southerly flow ahead of a frontal system along the Canadian border will promote a general warming trend during the next couple of days with widespread max temps in the 80s, 90s to near 100 in a few spots," said WSI Corp. in its morning report.

"Humidity levels will trend upward into the 60s to low 70s. The frontal system will slowly push a cold front southward across the Mid West during Saturday night through Tuesday with a chance for scattered showers and storms. This will begin to ease back temperatures across the north into the 70s and 80s, while suppressing 90+ temps into MISO South.

"After a lull in wind generation [Friday] morning, a surge of south to west-northwest winds should drive up wind gen tonight into the weekend. Output will peak 7-9 GW. Wind gen will subside from this peak early next week."

In overnight Globex trading August crude oil fell $2.22 to $47.89/bbl and August RBOB gasoline skidded 6 cents to $1.5482/gallon.