June natural gas is expected to open 3 cents higher Thursday morning at $3.22 as traders anticipate a government storage report to show declining inventory surpluses relative to historical averages. Overnight oil markets fell.

Weather forecasters are turning their attention to unusual heat in the Northeast and longer-term cooling in the MIdwest. “We are still tracking two very hot days on the East Coast [Thursday] and [Friday], with temperatures increased slightly today, especially toward the Northeast,” said Matt Rogers, president of Commodity Weather Group, in a morning report to clients.

“Meanwhile, meteorological spring ends in less than two weeks, and the closing features a cool-dominated pattern over the Midwest to South with some extension at times into the East Coast, while the West Coast leans to the hotter side (especially for the six-10 day portion). The coolest risks to the forecast seem to be for the Midwest to South, where we make additional cooler adjustments in our outlook today. The 11-15 day is also same to cooler for the Midwest, East, South, but at the end of the period we see a bit more spread in pattern options.”

Last Thursday’s storage report blew the socks off analysts looking for about a 53 Bcf build when it came in at 45 Bcf. Could the same thing happen Thursday morning due to a more subtle tightening in the supply-demand balance rather than any failure to incorporate the last heating degree day data into calculations?

At present the year-on-five-year surplus is 275 Bcf, but last Thursday’s 45 Bcf injection drew that number down from the week earlier at 303 Bcf. Could a similar contraction be in play when the Energy Information Administration (EIA) releases inventory data at 10:30 a.m. EDT?

Last year 71 Bcf was injected, and the five-year pace is for an 87 Bcf increase. IAF Advisors expects a build of 64 Bcf and Citi Futures Perspective is looking for an increase of 59 Bcf. A Reuters survey of 22 traders and analysts revealed an average 61 Bcf with a range of +47 Bcf to +66 Bcf.

Next week’s storage report is likely to have less of a weather demand component as heating and cooling loads balance each other out.

Heating loads for the week ended May 20 are expected to be sharply below normal. The National Weather Service (NWS) predicts that for the week ending May 20 New England will experience 31 heating degree days (HDD), or 29 fewer than normal. The Mid-Atlantic will see 19 HDDs or 27 fewer than normal, and the greater Midwest from Ohio to Wisconsin is forecast to have just 10 HDDs, or 41 fewer than its normal seasonal tally.

Cooling loads are just the opposite. NWS forecasts that New England will experience 19 cooling degree days (CDD), or 18 more than normal. The Mid-Atlantic will see 27 CDDs, or 22 more than normal, and the greater Midwest from Ohio to Wisconsin is forecast to experience 32 CDDs, or 20 more than its seasonal norm.

In overnight Globex trading June crude oil dropped 60 cents to $48.47/bbl and June RBOB gasoline fell 2 cents to $1.5810/gal.