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Weather Models Move Little; September Called Steady

September natural gas is expected to open flat Monday morning at $2.77 as temperature forecasts changed little over the weekend and a tropical system looks too remote to have a market impact. Overnight oil markets weakened.

Forecasters expect slightly warmer temperatures near term "[Monday's] six- to 10-day period forecast is warmer East and South, several cooler West when compared to Friday's forecast," said WSI Corp. in its morning report to clients. Continental United States population-weighted cooling degree days “are up 1.2 to 46.7, and forecast confidence is average. Models are in fair agreement, though there is some uncertainty late in the period."

WSI said that there were warmer risks in the East and South late "as the ECMWF Op, with support of some of the ECMWF EPS support the development of a sub-tropical ridge."

Mike DeVooght of DEVO Capital sees technical weakness begetting technical weakness. "Now that we have broken the $2.80 level on a closing basis, the next support level is at $2.60. On a trading basis, we will hold out producer collars and will stand aside for speculators," he said in a weekend report to clients.

The National Hurricane Center at 8 a.m. EDT reported that Tropical Storm Franklin in the western Caribbean was strengthening. It was located 230 miles east of Belize City and was sporting winds of 50 mph. Present trajectory was to the west northwest at 13 mph.

In overnight Globex trading September crude oil fell 56 cents to $40.02/bbl and September RBOB gasoline dropped 2 cents to $1.6252/gal.

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