August natural gas futures were set to open Monday about 3.5 cents lower at around $2.722/MMBtu, with mixed forecast changes over the weekend as production continues to pressure prices.

EBW Analytics Group counted cooling degree day (CDD) losses versus Sunday’s forecast for both the six- to 10-day and 11-15 day periods, according to CEO Andy Weissman.

“While weekly CDDs are decreasing, very hot weather in Texas should keep prices at Henry Hub firm,” Weissman said. “Last week’s much lower-than-expected 46 Bcf build is also likely to spur hopes for a third straight bullish weekly storage report” from the Energy Information Administration (EIA).

“With end of summer nearing, however, it is becoming increasingly difficult for natural gas to rally,” he said. “Absent another large storage miss on Thursday, the August contract is likely to go off the board Friday near its contract low.”

Bespoke Weather Services said its gas-weighted degree day forecast ticked higher over the weekend on short- and long-term heat, but with cooler trends in the medium term.

“August natural gas prices are down a percent this morning as the entire strip is getting hit relatively hard on medium-term cool trends and production that appears to have surged back this weekend,” Bespoke said. “We remain at an interesting point in the market as lofty production estimates do not appear to be reflected in weekly EIA data, keeping us skeptical that we are as loose as the estimates say.

“Yet production remains the focus of the market, and it will be hard to rally too significantly with evidence of further production growth sitting front and center,” Bespoke said. “…We see Thursday’s EIA data as supportive, and could easily see prices bounce should early August heat become more apparent this week, but for now production should keep prices under pressure as we’d look for $2.70-2.72 to try and hold.”

The Desk’s Early View storage survey Friday showed 16 respondents on average anticipating a 39.1 Bcf build from this week’s EIA report for the week ending July 20. The survey produced a range of 30 Bcf to 50 Bcf. Last year, EIA recorded a 19 Bcf injection, while the five-year average is a build of 46 Bcf.

Looking at the technicals, Rafferty Commodities Group on Monday pegged major support levels for the prompt-month at $2.702, 2.689 and 2.636.

“Last Monday, August made a high of $2.778 and then proceeded to test our support area around $2.700,” the firm said. “…Although August did manage to close above the downward sloping line on our daily chart on Thursday, there was no follow through on Friday. We now look for the market to go back down and test some of our support levels.”

September crude oil was set to open about 87 cents higher Monday at around $69.13/bbl, while August RBOB gasoline was trading about 2.4 cents higher at around $2.0925/gal.