Cooler trends in the overnight forecasts helped send natural gas futures slightly lower in early Friday trading. The August Nymex futures contract was down 1.7 cents to $2.307/MMBtu as of 8:30 a.m. ET.

Bespoke Weather Services noted a “small cooler adjustment” in its latest 11-15 day outlook based on the overnight guidance.

“We do still have some impressive heat to go through in the near term across the Midwest and East, and down into the Southeast, with the upcoming week easily the hottest we have seen so far,” Bespoke said. The pattern should bring widespread temperatures in the 90s but “the actual hottest days we currently see lie around the Fourth of July holiday period, mitigating some of the impact we might otherwise see if the best heat was on a typical day.

“The El Nino state has definitely weakened, and it is no coincidence that has occurred as the pattern shifts hotter, just as we saw in May,” the forecaster said. “We don’t believe it completely dies off, however, hence our idea that the near term above normal heat should not lock in.”

The Energy Information Administration (EIA) delivered the tightest stat of the summer so far in its weekly natural gas storage report Thursday, a 98 Bcf injection for the week ending June 21. The build compared to last year’s 71 Bcf injection and the five-year 70 Bcf average.

Working gas in storage as of June 21 was 2,301 Bcf, 236 Bcf above last year and 171 Bcf below the five-year average, according to EIA.

Genscape Inc. analyst Margaret Jones calculated the 98 Bcf print as close to neutral versus the five-year average, coming in about 0.2 Bcf/d loose when compared to degree days and normal seasonality.

“Including this most recent report, the last three weeks have averaged about 1.0 Bcf/d loose versus five-year weather and seasonality,” Jones said. Compared to the first three weeks of the injection season, “this recent 1.0 Bcf/d of looseness is almost 4 Bcf/d tighter than early season prints. During that time, production growth has been minimal while net exports have increased.”

Gas delivered to liquefied natural gas (LNG) facilities has increased about 1.3 Bcf/d over that time frame, while exports to Mexico have risen around 0.5 Bcf/d, according to Jones. This also coincides with a dramatic drop-off in prices, putting upward pressure on power burns as gas becomes more competitive with coal in the power stack.

“If prices stay in the $2.30 range or lower, and if LNG exports do not back off soon, we have the potential to see some stats in July that actually appear a bit tighter than the five-year average,” Jones said.

Early modeling by Tudor, Pickering, Holt & Co. (TPH) points to a 95 Bcf build for next week’s report.

As for this week’s 98 Bcf build, “total degree days for the week were 24% below the five-year average, but with the force majeure on the Alliance Pipeline taking a bite out of Canadian imports, weather-adjusted degree day correlations point to a 2 Bcf/d oversupplied market, a reduction from the 3 Bcf/d seen last week,” the TPH analysts said.

“While export flows on the Sur de Texas pipeline showed up in the data last week, reaching highs of 0.4 Bcf/d, news out yesterday suggests Mexico’s Federal Electricity Commission has halted the official start-up of the project due to a stand-off with IEnova/TC Energy; if protracted, this would serve as another blow to an already challenged gas macro.”

August crude oil futures were up 18 cents to $59.61/bbl shortly after 8:30 a.m. ET, while July RBOB gasoline futures were off fractionally to around $1.9409/gal.