After rallying 12.8 cents Friday on significantly hotter forecast trends, natural gas futures were hanging on to those gains early Monday as weekend weather data pointed to potentially record-setting July heat. The August Nymex futures contract was trading 0.4 cents higher at $2.422/MMBtu shortly after 8:30 a.m. ET.

Weather models saw “another solidly hotter move” over the weekend, putting the month of July on track to move into the top five hottest on record in terms of national gas-weighted degree day totals, according to Bespoke Weather Services.

“We had expected to see one more push toward the El Nino side of the spectrum, but that has not occurred, which allows for more upper level ridging to set up in the eastern half of the nation, leading to a much hotter outcome from the Midwest to the East, where highs in the 90s will be much more common” from days six through 15 of the outlook period, the forecaster said.

One possibly bearish weather factor to watch this week is a potential tropical cyclone developing in the Gulf of Mexico, according to Bespoke. This “could blunt heat in parts of the South late this week into the weekend, along with possibly temporarily closing off” liquefied natural gas shipping lanes.

EBW Analytics Group similarly highlighted the potential of this month’s heat to set new records.

“If today’s forecast holds, Week 2 could rank in the top five hottest weeks since 1950 -- enough to potentially send power sector demand for natural gas to record levels,” EBW CEO Andy Weissman said. “Moreover, very hot weather may extend further into July.

“With the net short position held by speculative investors at its highest level of the past three years, this shift in the weather forecast is likely to trigger a significant further price increase this week. The magnitude and duration of the increase, though, will depend heavily on whether temperatures moderate again later in the month.”

Based on the weekend weather trends, which added 13 cooling degree days to the forecast compared to Friday’s estimate, power burns could soon reach a new summer high, according to Genscape Inc.

“Current weather forecasts suggest next week may see the highest cooling load demand for natural gas so far this season,” Genscape analyst Margaret Jones said. “Current Genscape estimates suggest gas demand for power generation this week will average 38.3 Bcf/d, but next week gas demand for power is expected to swell to 41.2 Bcf/d as hotter weather moves in, peaking next Tuesday and Wednesday.”

This comes as production set a new record daily high over the weekend, according to the analytics firm. Genscape estimates showed Lower 48 production climbing to 90.5 Bcf/d on Saturday (July 6), with that figure staying above the 90 Bcf/d mark every day since Wednesday (July 3). Production over the weekend averaged 1.5 Bcf/d more than the prior 30-day average.

August crude oil futures were off 12 cents to $57.39/bbl just after 8:30 a.m. ET, while August RBOB gasoline was trading about 1.6 cents lower at $1.9140/gal.