By the dawn’s early light, natural gas futures were trading higher Wednesday as traders awaited the latest round of government storage data to get a better read on balances heading into the Independence Day holiday. The August Nymex futures contract was trading 2.9 cents higher at $2.269/MMBtu shortly after 8:30 a.m. ET.

This week’s Energy Information Administration (EIA) storage report -- scheduled for release at 12 p.m. ET Wednesday because of the Fourth of July holiday -- is expected to show a larger-than-average build but one well shy of the triple-digit injections recorded earlier in the refill season, according to estimates.

A Bloomberg survey Tuesday showed a median prediction of 83 Bcf based on seven estimates. A Reuters poll pointed to an 85 Bcf injection, with a range of 76 Bcf to 94 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Tuesday at 85 Bcf. ION Energy analyst Kyle Cooper called for an 87 Bcf build. NGI’s model predicted a build of 88 Bcf.

Last year, EIA recorded a 76 Bcf injection for the period, and the five-year average stands at 70 Bcf.

“It was slightly warmer than normal over the eastern half of the country, while cooler versus normal over the West and Plains,” NatGasWeather said of this week’s report period. “Our analysis predicts a build of 80 Bcf, a touch to the bullish side.”

As for the overnight weather data, the European model added 7 cooling degree days to the 15-day outlook compared to 24 hours earlier, bringing it in better agreement with the Global Forecast System (GFS) model, NatGasWeather said.

“It’s possible the natural gas markets notice the hotter overnight European model even though there’s still expected to be bouts of cooling across the northern U.S. during the second week of July,” the forecaster said. “Any further hotter trends would likely give a more obvious bullish bias to weather patterns, making today’s midday and afternoon data important.

“...We expect markets will be hoping to see tightening in the EIA report, then with the focus turning to the midday GFS data to see if it trends hotter.”

As the potential demand-dampening Independence Day holiday approaches, the natural gas market finds itself stuck “between a rock and a hard place,” according to EBW Analytics Group CEO Andy Weissman.

“With demand likely to decline significantly over the four-day holiday weekend, we expect cash market prices to fall further today, putting additional downward pressure on the front end of the forward curve,” Weissman said. “At the same time, however, with natural gas prices already at distressed levels, the downside potential is limited -- especially at this point in the summer cycle, with the heart of the summer air conditioning season just approaching.”

August crude oil futures were up 50 cents to $56.75/bbl just after 8:30 a.m. ET, while August RBOB gasoline was trading about 1.6 cents higher at $1.8867/gal.