Coming off heavy selling over the previous two sessions, natural gas futures were trading slightly higher early Wednesday as forecasts continued to show intense heat fading by next week. The August Nymex futures contract was up 2.7 cents to $2.333/MMBtu just after 8:30 a.m. ET.

The overnight guidance trended slightly cooler, mostly in the six- to 10-day period, showing a stronger “incoming upper level trough” moving into the middle third of the Lower 48 following the current stretch of heat, according to Bespoke Weather Services.

“We still are looking at peak heat this Friday and Saturday, featuring numerous upper 90s to around 100 degrees for highs across a large part of the Midwest and East on those days,” the forecaster said. “Temperatures decline considerably next week, lasting through the balance of July and perhaps the first few days of August before any notable heat returns to the eastern half of the U.S.”

As for the latest balance data, Gulf of Mexico production shut in from former Hurricane Barry “should be back up and running any time now,” Bespoke said. Power burn levels remained weaker compared to last week on a weather-adjusted basis “despite being the strongest absolute burns of the summer...We feel increasing wind is playing a role in this weather-adjusted burn weakness, and if so, we may see stronger burns next week once wind fades away” even with lower overall gas-weighted degree days.

Radiant Solutions also made a cooler adjustment to its latest six- to 10-day outlook Wednesday, with changes focused in the Midcontinent and Southeast.

“This comes along high pressure pressing southward into the Midwest early and encompassing most in the eastern half during the mid to late period,” the forecaster said. “A round of near normal to below normal temperatures are in association. Prior to the arrival of this cooler and drier air mass are temperatures still in the lower 90s on Day 6 in New York City just ahead of the cold front. Eastern heat wanes quickly after that, as a trough settles over the region.”

The latest 11-15 day forecast underwent a “mix of changes,” leaning cooler in the central Lower 48 and warmer in the East.

“Like the previous outlook, the focus of above normal temperatures is in the West, while most of the Eastern Half falls into the normal category,” Radiant said.

With forecasts showing heat peaking later this week, traders could look to take profits ahead of Thursday’s Energy Information Administration storage report, according to EBW Analytics Group.

“The barrier confronting the market at this point is that, with the hottest days of the summer soon to be over, there are few if any positive catalysts in sight to move prices higher -- but no shortage of bearish catalysts,” such as the completion of the Gulf Coast Express pipeline in the Permian Basin, demand destruction from potential hurricanes or shortfalls in liquefied natural gas feed gas demand, EBW CEO Andy Weissman said.

“Return of very hot weather in August, if it occurs, could slow the decline. Even a small bounce up, however, is likely to prompt additional shorting. Once August heat fades, significant further declines are likely.”

August crude oil futures were trading 70 cents higher at $58.32/bbl shortly after 8:30 a.m. ET, while August RBOB gasoline was up about 2.0 cents to $1.9121/gal.