September natural gas is set to open 2 cents higher Thursday morning at $3.95 ahead of an inventory report that is expected to show storage injections lagging last year. Overnight oil markets rose moderately.

Thursday's Energy Information Administration storage report is likely to have something for both the bulls and bears. Estimates are swirling around the 84 Bcf level, and if compared to last year's 90 Bcf injection could be interpreted as bullish. Yet the five-year average stands at 49 Bcf, and that would warrant a bearish conclusion. One thing to remember, though, is that last year's 90 Bcf build included a 14 Bcf reclassification of base gas to working gas. With that in mind an 80-ish build could be seen as bearish on both counts.

IAF Advisors calculates a 79 Bcf increase, and United ICAP is expecting a build of 85 Bcf. A Reuters poll of 25 traders and analysts revealed an average 84 Bcf with a range of 79-90 Bcf.

Bentek Energy calculates a slim 80 Bcf injection based on a high cooling degree day (CDD) count in Texas and the Southeast with a partial offset in the East. "Power burn demand came in at the highest weekly average of the year at 27.9 Bcf/d, pushed higher by a 1.5 Bcf/d uptick in power demand within the Producing Region from the previous week. Total population-weighted cooling degree days within both the Southeast and Texas increased week-over-week by 11 and 21 degree days, respectively," the firm said in a report.

"The strong cooling demand within the Producing Region and continued high demand levels within the West Region cut Bentek's total sample injections with the regions by a combined 10 Bcf week-over-week, which was offset slightly by a small uptick in sample injections within the East Region by 3 Bcf. Total population-weighted CDDs within the East fell significantly week-over-week; however a drop in net flows into the region by nearly 0.5 Bcf/d helped keep storage injections similar to the previous week's levels."

The market's recent firmness has technicians pondering whether the historical mid-August seasonal cycle low might be within reach. "Seasonal cycle low in place?" queried Brian LaRose of United ICAP following Wednesday's trading. "If so, the risk from here is a rally of 107% into late November. The question at hand, where do the bears get in trouble?

"[We] see the first sign of trouble for the bears as a close above $3.998. However, to solidify the case for a bottom, the large cluster of resistance stretching from $4.267 to $4.442 must be exceeded. Bulls have some convincing to do."

In overnight Globex trading September crude oil gained 34 cents to $97.26/bbl and September RBOB gasoline rose fractionally to $2.7429/gal.