Natural gas futures were trading slightly higher early Thursday as traders awaited the latest government inventory figures and as a wave of hotter than normal temperatures in the forecast continued to point to strong demand in the weeks ahead. The August Nymex contract was up 0.7 cents to $1.785/MMBtu at around 8:40 a.m. ET.

Estimates have been calling for the Energy Information Administration (EIA) to report a lighter than average injection in the upper 40s Bcf for the week ending July 10.

A Bloomberg survey found injection estimates ranging from 38 Bcf to 50 Bcf, with a median of 47 Bcf. A Reuters poll showed a low estimate of 34 Bcf and a high of 52 Bcf with an average of 47 Bcf. NGI estimated an injection of 49 Bcf for this week’s report, which is scheduled for 10:30 a.m. ET.

The forecasts compare with a 67 Bcf storage build in the same week in 2019 and a five-year average injection of 63 Bcf. EIA previously reported a 56 Bcf injection for the week ended July 3.

“It was hotter than normal over most of the country besides areas of the West and locally the South and Southeast” during this week’s EIA report period, forecaster NatGasWeather said. “Our algorithm predicts a build of 43 Bcf, a touch to the bullish side, but tricky due to the Fourth of July holiday.”

After support around $1.72 and $1.73 held in Wednesday’s session, EIA’s storage report “poses the next significant test for the August contract,” according to analysts at EBW Analytics Group.

“Most estimates are within a narrow range between 45 and 50 Bcf,” they said. “Only a few analysts are predicting a smaller build, with even fewer predicting a build above the top of the range.

“With very hot weather on the horizon…we would expect a build within the predicted range to open the door to further gains, with the August contract moving into the low- to mid-$1.80s soon.”

Looking at the latest guidance, NatGasWeather said the Global Forecast System (GFS) model has been “slowly giving back demand” over the past 24 hours but that the European model has countered by trending hotter.

“Both still forecast a hotter than normal pattern through the end of the month into early August, but with the European model stronger and hotter with the upper ridge next week and beyond,” the forecaster said. “To our view, the GFS is likely too cool and the European model slightly too hot.”

Meanwhile, Genscape Inc.’s daily Lower 48 production estimate totaled 87.2 Bcf/d as of early Thursday, marking the seventh straight day supply has held in the 87 Bcf/d range.

“Lower 48 production declines bottomed out at 84.9 Bcf/d on May 20, and the production recovery has hovered between roughly 85.5 Bcf/d and 88.5 Bcf/d since then,” Genscape analyst Josh Garcia said in a note to clients.

August crude oil futures were off 53 cents to $40.67/bbl at around 8:40 a.m. ET, while August RBOB gasoline was down about 1.5 cents to $1.2499/gal.