August natural gas futures were set to open Tuesday about 2.2 cents higher at around $2.782/MMBtu, bouncing off of support around $2.75 even as forecasters noted slightly cooler trends overnight in the major weather models.

The Global Forecast System and European models each came in “a touch cooler” overnight but continued to show systems with cooler temperatures sweeping through the crucial markets in the Midwest and East, according to NatGasWeather.

“It will remain very hot across the western, central and southern U.S. with strong high pressure overhead and where highs will consistently reach the 90s and 100s for regionally strong demand,” NatGasWeather said. “But for patterns to again become bullish, the east-central U.S. will need more impressive heat to show up in the maps, and while the overnight data teased it, it failed to trend notably hotter.”

Storage deficits appeared likely to increase slightly with this week’s Energy Information Administration report before “stalling next week, then easing in the weeks after,” according to the firm. “What was once a lengthy battle between hefty deficits and record production has seen production quickly gain the upper hand with prices down 25 cents the past 10 sessions. Although, we don’t see the markets being in too big of a hurry to push prices much lower until deficits drop under minus 500 Bcf.”

Genscape Inc. senior natural gas analyst Rick Margolin said the firm observed an uptick in production to start the week, coinciding with the return to service of Leach XPress. Affiliate SpringRock’s pipeline-based production estimate on Monday showed Lower 48 volumes back above 80.3 Bcf/d after falling just below the 80 Bcf/d mark.

From a technical standpoint, the bulls have plenty to do to regain the momentum, according to ICAP Technical Analysis analyst Brian LaRose.

“Bulls are going to need more than a doji star bottom on the daily candlestick chart to make a case for a recovery,” LaRose said. “For starters, we would like to see natural gas climb back above $2.810 and the bulls shift the technical picture in their favor.

“We have no reason to entertain a recovery otherwise. We still see room down to $2.701-2.672, even $2.610-2.607-2.600 next should natural gas slip beneath $2.752-2.730.”

Meanwhile, liquefied natural gas (LNG) feedgas demand has been trending upward month/month (m/m) despite a small drop during the week ending July 12, according to consulting firm Energy Aspects.

“With maintenance on the Creole Trail pipeline’s Gillis compressor station postponed from July 8-10 to an unscheduled later date, Sabine Pass has been running above 90% capacity every day this month,” Energy Aspects said. “LNG feed gas to the facility has averaged 2.8 Bcf/d so far in July, up by 0.3 Bcf/d m/m. Cove Point shipped its third cargo of July” last week, “equalling its total for all of June, even as its gas intake has dipped by 0.1 Bcf/d m/m to 0.5 Bcf/d.”

August crude oil was set to open about 5 cents higher at around $68.11/bbl, while August RBOB gasoline was trading about a penny higher at around $2.0123/gal.