October natural gas futures were trading about 2.4 cents higher a little before 9 a.m. ET Monday at around $2.990/MMBtu as forecasters noted a warmer shift in weekend guidance that dropped heating demand expectations but added some cooling demand to the outlook.

Bespoke Weather Services said forecasts “warmed substantially” over the weekend.

The firm pointed to an “increase in sustained ridging across the East even as colder risks looked to build across the Great Plains.” Forecasts lost a “chunk” of heating degree days but adding a smaller number of cooling degree days, with gas-weighted degree days (GWDD) “slightly below average now expected through the next couple of weeks but risks to the colder side moving into Week 3.”

Bespoke said slightly looser power burns and “continually elevated production” appeared to be pressuring the October contract early Monday morning.

“Power burns still do remain relatively tight, and storage levels are low enough to keep some bid in winter prices,” Bespoke said. “However, as the market loosens and we see less impressive forecasts the next couple of weeks, we would expect very strong cash prices to weaken somewhat, pulling the front of the strip back as well. Eventually, until forecasts show serious cold risks, we could see $2.85 put in play over the coming week,” with any “cash-driven bounce” to $2.98-3.00 likely to fail.

EBW Analytics Group CEO Andy Weissman said forecasts last week signaling a potential early start to the heating season likely triggered the more than 20-cent run-up in the front month contract since last Monday.

“Over the weekend, another major shift occurred, paring back sharply the previously expected cold air intrusion from Canada,” Weissman said. “The resulting loss in space heating demand is partially offset by a major increase in expected air conditioning demand. On a net basis, however, demand in Weeks 2 and 3 is still projected to fall by nearly 10 Bcf compared to last Friday.

“In the current overly exuberant market, the October contract could still push higher early this week,” he said. “However, resistance just above $3.00 is strong. Absent another forecast shift, this should limit any gains and lay the groundwork for prices heading back down soon.”

Lower 48 production set yet another record high over the weekend, topping 83.51 Bcf/d, according to Genscape Inc. pipe production estimates. Monday’s estimate remained above 83 Bcf/d, bringing the September month-to-date average to 82.11 Bcf/d, Genscape senior natural gas analyst Rick Margolin said.

“This marks an increase from August of more than 0.65 Bcf/d and is a staggering 8.75 Bcf/d greater than” the September 2017 month-to-date average, Margolin said. “The year-on-year growth leaders continue to be the Northeast (up more than 4.95 Bcf/d from last September), Texas (up 1.76 Bcf/d), Gulf Coast (Gulf of Mexico and Louisiana, up 1.59 Bcf/d) and Permian (up 1.41 Bcf/d).

“Only the Midcontinent and San Juan are currently posting lower output this September versus last.”

Shortly before 9 a.m. ET, November crude oil was trading about $1.04 higher at around $71.82/bbl, while October RBOB gasoline was trading about 2.7 cents higher at around $2.0439/gal.