Coming off a sharp sell-off Tuesday, natural gas futures were trading slightly higher early Wednesday as overnight forecasts left the outlook mostly unchanged. The July Nymex futures contract was up 1.8 cents to $2.346/MMBtu shortly after 8:30 a.m. ET.

Total gas-weighted degree day (GWDD) expectations for the next two weeks remained more or less unchanged on the overnight guidance, according to Bespoke Weather Services.

“We did see a small shift toward a warmer West with less southern heat in the 11-15 day period, though this had little impact on the projected national demand,” Bespoke said. “Heading into early July, models moved a little closer together today,” with the American model “not showing as much of a cooler eastern trough” and the European data “moving slightly hotter in the West and a bit cooler in the East.

“While we still do not see extreme heat on the way, our view is a continued lean near to slightly above normal GWDDs late June into early July, with a better chance of a cooler pullback in the eastern U.S. coming after the first week or so in July, as the heat ridge migrates back out into the western U.S.”

The steep 5.8-cent sell-off in the front month Tuesday, occurring after resistance held early in the day at around $2.40, may have gone too far, according to EBW Analytics Group.

“With a firm ceiling in place, futures quickly began to sell off yesterday, heading steadily down all day,” EBW CEO Andy Weissman said. “The decline accelerated in the afternoon,” possibly fueled by expectations for another “strongly bearish” Energy Information Administration storage report this week that could be in the triple digits.

“In our view, yesterday’s sell-off was overdone,” he said. “Cash prices held reasonably firm, with prices at Henry Hub averaging $2.38 -- well above the final settlement price of the July contract. While the July contract could trade in the $2.30s for the rest of the week, as July weather grows nearer, futures are likely to post significant gains.”

Meanwhile, bulls might find encouragement in the recent activity at Cheniere Energy Inc.’s Corpus Christi liquefied natural gas (LNG) terminal following the start of liquefaction operations at Train 2 at the facility last week.

“Genscape LNG analysts believe LNG was produced at Train 2 beginning on June 12 based on observations via our proprietary infrared monitors and verified by an uptick in scheduled delivery nominations to the facility (more than 820 MMcf/d),” analyst Amir Rejvani said. The LNG analysts “analysts assume that fuel use for an average Cheniere train represents roughly 70 MMcf/d of deliveries. Anything more than that is presumed to be liquefied volumes.

“Genscape analysts expect that Train 1 is currently using less than 750 MMcf/d, and therefore any additional deliveries to the facility exceeding this are assumed to be headed to Train 2 at this time.”

July crude oil futures were up 4 cents to $53.94/bbl shortly after 8:30 a.m. ET, while July RBOB gasoline was off fractionally to $1.7145/gal.