The August natural gas futures contract was set to open Wednesday about 2.3 cents higher at around $2.755/MMBtu, building on the prior day’s modest gains as forecasters noted little change to the weather outlook overnight.  

The prompt month contract was able to test resistance at $2.74 Tuesday with the help of hot weather expectations for August showing up in the 11-15 day outlook period, according to EBW Analytics Group CEO Andy Weissman.

“In the end, though, with cooler-than-normal weather covering the middle part of the country and prices at Henry Hub averaging just $2.72, the August contract was only able to gain 1.1 cents,” Weissman said. “From a purely technical standpoint, the August contract appears to be poised to challenge resistance as high as $2.76-2.79. With this morning’s forecast largely unchanged, however, the front-month contract is likely to continue trading below this level today.

“Projected end-of-injection-season storage has been declining rapidly and is currently targeting 3,300 Bcf,” he said. “At some point, this could help establish a floor. With the end of summer not far off, though, further declines remain likely.”

The overnight Global Forecast System model was a little cooler overnight, while the European model was a little hotter, NatGasWeather said.

“The data continues to show hot upper high pressure building across the East Coast from off the Atlantic Ocean during the first week of August,” the firm said. What is “most important going forward” is how much of the heat dome covers the East, “where a slight shift further westward would bring notable increases in expected demand.”

Record production continues to weigh on prices even as bullish deficits are set to increase with this week’s Energy Information Administration storage report, according to NatGasWeather.

“We continue to view $2.70 as important to both the August and September futures contracts, with both months recently testing this level and bouncing, giving bulls slight momentum,” the firm said.

Genscape Inc. affiliate SpringRock’s estimates Wednesday were showing a 0.9 Bcf/d decline day/day (d/d) in Lower 48 production, though the firm noted that daily pipeline-reported revisions recently have added as much 1 Bcf/d to that total.

“The initial top-day estimate based off grossed up pipeline nominations is showing Lower 48 volumes down to 78.65 Bcf/d, led by nearly 0.5 Bcf/d of declines out of the Northeast, about 0.2 Bcf/d of drops in the Gulf of Mexico and a over 0.1 Bcf/d drop out of the San Juan,” Genscape senior natural gas analyst Rick Margolin said.

“Northeast estimated declines are spread across all regions, with the largest (0.18 Bcf/d) out of Ohio, led by a nearly 0.11 Bcf/d d/d drop in receipts on REX gathering systems in Monroe County,” Margolin said. “West Virginia’s pipeline sample is also down around 0.1 Bcf/d d/d with more than half the declines occurring on Equitrans’ receipt meter from the Mobley processing plant.”

September crude oil was set to open about 6 cents higher at around $68.58/bbl, while August RBOB gasoline was trading about 1.4 cents higher at around $2.1096/gal.