Not wanting to jump the gun on recent weather data, natural gas traders early Wednesday were holding futures prices relatively steady after the previous day’s 4-cent rally. The July Nymex gas futures contract was trading at $2.394, down about a half-cent, at around 7:45 a.m. ET.

The last few weather models showed slightly warmer trends for later this month, and the overnight Tuesday data shifted even hotter toward the final third of June, according to Bespoke Weather Services. This was the risk the firm had been expecting “based on shifts in tropical forcing patterns and what should be another temporary backing off of the intensity of the El Niño state.”

The latest weather data shows heat building, especially across the southern half of the United States, which, pattern wise, is similar to what occurred in the second half of May. This shift is evident now in both the American and European ensembles, “both of which are quicker to erode this week’s cooler pattern, and allow for near to slightly above-normal gas-weighted degree days thereafter,” Bespoke chief meteorologist Brian Lovern said.

The pattern portends stormy conditions returning to the Midwest, so heat will continue to be blunted there, but Bespoke said there could be a few hotter days that start to show up in parts of the East moving forward, again similar to the late May pattern.

Weather aside, TC Energy Corp.’s long-awaited 2.6 Bcf/d Sur de Texas-Tuxpan pipeline is now complete, the company said late Tuesday. The nearly 500-mile, offshore project had experienced multiple delays, with TC management late last year projecting an in-service date of early 2Q2019. The pipeline is considered critical for alleviating gas supply constraints for power generators and industrial consumers in southeastern Mexico amid declining gas output by national oil company Petróleos Mexicanos, aka Pemex.

“While fully operational capacity is still an unknown, and downstream takeaway constraints are a potential issue, the fact that a route to deliver U.S.-sourced natural gas to the thirsty central and southeastern Mexican markets is a plus for both Mexican consumers and U.S. producers,” Mobius Risk Group said.

On the fundamentals side, production was revised considerably higher late Tuesday but remains around 1 Bcf off highs, according to Bespoke. There was also a tighter revision to the weather-adjusted burns.

“In absolute terms, the burns are very strong given that demand currently is quite low. This keeps daily balances rather tight, and given the hotter shift in the weather pattern, this brings our overall sentiment back into the ‘slightly bullish’ category,” Lovern said.

He cautioned, however, that weak cash prices could potentially drag futures down later this morning if there is any weakness with current low demand and feed gas demand from liquefied natural gas export terminals still off highs. Thursday’s storage data “is, of course, the big risk to this idea, but if we avoid another bearish surprise, we see $2.50 back in play into next week.”

Crude oil futures were trading $1.45 lower at $51.820/bbl, and RBOB gasoline futures were trading 3.57 cents lower at $1.7206.