A hotter-trending forecast over the weekend for late July into early August helped lift natural gas futures several cents higher in early Monday trading. The August Nymex futures contract was up 2.5 cents to $2.276/MMBtu shortly after 8:30 a.m. ET.

Over the weekend, the weather models trended cooler in the short-term but hotter from days six through 15 of the outlook period, according to Bespoke Weather Services.

“There is a northern focus to the heat after this week, with the South, for now, not seeing anomalous heat throughout the 15-day period,” Bespoke said. This is helping to keep forecast gas-weighted degree day (GWDD) totals “somewhat in check, but we still look to run a little hotter than normal to close out the month of July and begin the month of August, having added around 5-6 total forecast GWDDs since Friday afternoon.

“...Balance data from the weekend remained rather weak, with burns continuing to look unimpressive relative to the GWDDs in place, and production having moved higher over the weekend.” Liquefied natural gas exports “are a little lower as well after hitting new highs late last week.”

Meanwhile, despite the “potentially lethal extreme heat” that fell over much of the country over the weekend, the natural gas markets have instead been focused on the more seasonal weather ahead and the bearish implications of an early start-up for the “massive” 2.0 Bcf/d Permian Basin-takeaway Gulf Coast Express pipeline, according to EBW Analytics Group CEO Andy Weissman.

“This morning’s model runs call for cooler weather in Week 1 but hotter in weeks 2-3,” Weissman said. “This forecast shift could boost prices a few cents this morning. Projected temps in weeks 2-3, however, are not nearly as hot as they were the past few days. With cash prices at Henry Hub averaging just $2.275 last Friday and likely to remain depressed, a sustained rally is improbable. We expect further declines before summer ends.”

On the supply side, Lower 48 dry gas production has rebounded to only slightly below levels observed prior to Hurricane Barry’s formation over the Gulf Coast earlier this month, according to Genscape Inc.

“Our daily estimate of production this weekend hit 89.4 Bcf/d on Saturday,” Genscape senior natural gas analyst Rick Margolin said. “This was just 0.84 Bcf/d below the seven-day average registered prior to the arrival of Barry. Total Gulf region output still lags pre-storm levels, but that delta is narrowing on a daily basis. Barry is still having lingering impacts on Gulf of Mexico production.

“Although the storm strength was relatively low, the storm path through mid- and eastern offshore Louisiana caused significant impacts, as it led the storm through a very concentrated area of production. The production shut-in estimate for today is about 555 MMcf/d, down from yesterday’s estimate of around 650 MMcf/d.”

August crude oil futures were up 65 cents to $56.28/bbl shortly after 8:30 a.m. ET, while August RBOB gasoline was trading fractionally higher at $1.8440/gal.