August natural gas is seen opening 2 cents higher Thursday morning at $4.38 as traders have to factor in moderating East Coast weather in the wake of now Hurricane Arthur and also gear up for the expected trading volatility following the release of government storage figures. Overnight oil markets slumped.

Last week 110 Bcf was injected, slightly more than expectations and well ahead of historical builds. August futures tumbled. Bears will be looking for an encore performance when the Energy Information Administration (EIA) issues what is expected to be a similar-sized report and also well ahead of last year's 76 Bcf injection and a five-year pace of 68 Bcf.

Estimates this time around are for an increase just over 100 Bcf. United ICAP predicts an injection of 104 Bcf, and IAF Advisors in Houston is looking for 102 Bcf. A Reuters poll of 21 traders and analysts revealed an average 100 Bcf with a range of 91 Bcf to 106 Bcf.

Bentek Energy calculates a build of 99 Bcf and noted high power consumption along with hefty injections. "Total U.S. power burn demand grew by 0.9 Bcf/d week-over-week, and is the second straight week with power burn sustained above the 24 Bcf/d mark. The expected injection marks the first week since the May 2 storage week with a build below triple-digits as the country moves into peak power burn demand months. Total population-weighted cooling degree days remained fairly flat week-over-week, with 67 degree days reported compared to the previous week's total of 65. However, the sustained level of higher temperatures could have impacted storage to a greater degree than what the fundamentals suggest, which was reflected in Bentek's sample of injections."

Arthur still remains in the trading mix. At 8 a.m. EDT Thursday the National Hurricane Center (NHC) said Hurricane Arthur was 300 miles southwest of Cape Hatteras, NC, and had up to 80 mph winds. It was moving to the north-northeast at 7 mph, but " a turn toward the Northeast with an increase in forward speed is expected [Thursday] followed by a further increase in forward speed tonight and Friday. On the forecast track the core of Arthur is expected to approach the coast in the hurricane warning area tonight."

Joe Bastardi at WeatherBELL Analytics sees Arthur hitting the Outer Banks. "Consider that the pressure is down 12 millibars (mb) in 24 hours and it's now coming into the best area for intensification. Basically, the ECWMF [European model] is in line with us. It has this to 967 mb with 85 knot winds by tomorrow morning. The track NHC has is right on ECMWF but it is disturbing to see models notorious for being too far east being farther west. The GFS [Global Forecast System] track is from Cape Lookout to Oregon Inlet, which is the worst path possible for the Outer Banks."

In overnight Globex trading August crude oil fell 63 cents to $103.85/bbl and August RBOB gasoline dropped more than a half cent to $3.0160/gal.