September natural gas prices were set to open 3.4 cents lower at $2.91 Monday as traders looked to cooler weather ahead and returning production to help bring the market back into balance.

The Nymex September gas contract showed the first signs of weakening last Friday (Aug. 10) when, after six straight days of gains, the prompt month settled roughly a penny lower ahead of the weekend. Weather guidance, though murky, was a touch cooler on Friday, and although model volatility continued through the weekend, a clearer trend arose with an upstream weather pattern that favors cooler risks from the Midwest into the South and a gradually arising long-range eastern ridge that could return some heat from the Southeast to the Northeast, according to Bespoke Weather Services.

This comes as weather data also pointed to some short-term warming trends across the northern tier this week, which should keep gas-weighted degree days elevated into the Aug. 18-19 weekend before gradually falling off from there and remaining lower.

“These mixed risks into week 3 are not quite as bearish as they had been, but we see more high confidence cool weather in the 11-15 day time period as well to cancel them out,” Bespoke chief meteorologist Jacob Meisel said.

In addition to the cooler weather outlooks, traders are also looking to production to start chipping away at the persistent storage deficit. Genscape Inc. said estimated production during the Aug. 10-11 weekend growing to 80.97 Bcf/d, about 0.8 Bcf/d above last week and month-opening levels, and within just 2 MMcf/d of setting a record high.

More than half of those gains are coming out of Pennsylvania, supplemented by higher output in Ohio (up 0.17 Bcf/d versus month’s start), Texas (0.13 Bcf/d), the Permian Basin (0.12 Bcf/d) and the Midcontinent (0.12 Bcf/d), Genscape senior natural gas analyst Rick Margolin said.

Relative to the start of the month, only the San Juan Basin and the Rockies are showing declines, the latter being primarily a product of a variety of maintenance events on both sides of the Continental Divide in the Denver-Julesburg, Piceance and Powder River basins.

Some of the supply gains, though, are being offset by lower imports from Canada, with current levels having dropped to some of the lowest levels this summer to date. Maintenance-induced restrictions are making exporting out of Alberta limited, and this has occurred at the same time the province is pushing to refill storage inventories, which have been trailing the five-year average for most of the summer, Margolin said.

As for price action on Monday and later this week, EBW Analytics said given the September contract held above the $2.92 resistance level last week, this leaves the door open to another test of resistance this week, at least in theory. The possibility of a move up is further supported by the potential that the Energy Information Administration (EIA) will report the smallest injection of the season this coming Thursday, it said.

“The end of very hot summer weather, however, is just 10-14 days away. Absent the fourth large bearish storage miss in five weeks, we expect the September contract to end the week with a 3-7 cent loss,” EBW CEO Andy Weissman said.

Bespoke said although looser balances easily put a $2.90 break in play, it would need to see a bit more weakness along the strip to think any break is sustained, especially with short-term warmth allowing a bit more cash strength early in the week. Generally, the weather forecaster sees risk skewed lower overall “but it may be hard to test the $2.85 support level in the next couple days without clearer daily loosening and/or weaker EIA data,” Meisel said.

Crude oil future were trading 20 cents lower at $67.43, and RBOB Gasoline futures were trading fractionally lower at $2.0359.