September natural gas futures were set to open Tuesday about 3.6 cents higher at around $2.977/MMBtu as overnight guidance continued to advertise hotter trends, potentially complicating efforts to shrink large inventory deficits.

NatGasWeather noted hotter overnight trends for both the Global Forecast System and European weather models for next week and into the first week of September, showing a “stronger/hotter/bullish ridge over the central, southern and eastern U.S. for strong late season summer demand…

“The net result is hefty deficits won’t improve until mid-September at the earliest,” the firm said. “There are ways weak weather systems expose flaws in the hot ridge over time for cooler trends, but unless this starts gaining momentum in the data, eight- to 15-day outlook maps are going to continue showing widespread above normal temperatures over most of the country besides the Northwest.”

Bespoke Weather Services noted “very significant” hotter trends in both its medium- and long-range forecasts, boosting the firm’s latest gas-weighted degree day (GWDD) tally.

“There are questions surrounding how quickly ridging slides westward in the long-range, with a quicker shift potentially easing GWDDs somewhat into early September, and we do see risks that Week 3 cools slightly from what we see in Week 2,” Bespoke said. Even so, population-weighted cooling degree days “near or at record levels are likely for next week.”

The front month could test $2.98-3.00 Tuesday, “even as we see a strip that is not particularly supportive and balances that indicate once we begin losing GWDDs prices would fall quickly,” the firm said. “Cash prices may not be quite as firm as we see GWDDs fall off over the next couple of days, though expectations of significant heat next week should keep them from really falling off.”

Looking at Monday’s price action, EBW Analytics Group CEO Andy Weissman attributed the market’s failure to rally on a “bullish forecast shift” over the weekend to pipeline scrape reports showing record production levels.

“Even by recent standards, the growth in production this summer has been startling, with a reported increase of 2.8 Bcf/d in the past eight weeks — one of the largest short-term gains ever,” Weissman said. “Further, with 4.5 Bcf/d of new takeaway capacity in the Northeast scheduled to come online between now and October, the increase over the next eight weeks could be almost as steep.

“This runaway production is likely to restrict near-term gains,” he said. “As the impact of recent forecast shifts on storage becomes clearer, however, the September contract is likely to test resistance near $3.00.”

September crude oil was set to open about 79 cents higher at around $67.22/bbl, while September RBOB gasoline was trading about 1.4 cents higher at around $2.0289/gal.