August natural gas is set to open a penny higher Monday morning at $4.42 as market bulls lick their wounds from last week’s 14-cent loss and scour the market landscape for any sign of increased demand. Overnight oil markets fell.

If the conclusions of some are correct, short-term bulls may have to go into hibernation. “Natural gas settled lower across the board. Gas has been steadily moving lower after failing to push above key resistance ($4.80) earlier this month, [and] at week’s end, we were approaching the bottom side of its recent trading range,” said Mike DeVooght, president of DEVO Capital in a weekly note to clients.

“Gas has been under pressure the past couple weeks, primarily because of higher than anticipated storage injections and the lack of any significant cooling demand. Many that have become bullish on gas prices have done so because they anticipate ending the summer at historically low storage levels. That may very well be the case if we don’t have a cool summer, but if we do, we will start to see the deficit continue to tighten, which will take wind out of the short-term bull sails. To have a substantial bull market, we feel we need to see an uptick in demand to offset the steady production increase we are experiencing in the U.S. We could see short-term weather-related spikes, but we still feel selling rallies above $4.50 for producers is an attractive forward selling level.”

DeVooght counsels end-users and trading accounts to stand aside and said those with exposure to lower prices should hold the balance of a short summer strip initiated at $4.20 to $4.30. A second short summer strip begun at $4.50 should also be held.

The remainder of the summer strip settled Friday at $4.394.

Joe Bastardi, meteorologist at WeatherBELL Analytics, said there is little in the way of change in the morning WeatherBELL 20-day forecast. “Days one to five: major cold shot down Plains pushes into the East, ending the warm surge while the West warms, [and] Days six to 15: pattern remains transient. Forecast based on pattern repetition.” According to the NOAA Climate Forecast System “Days 15-35 are very cool.”

WeatherBELL figures show cooling degree day (CDD) requirements for the next 15 days at about normal. WeatherBELL predicts nationally an accumulation of 162.2, fewer than last year’s 174.6, about right in line with the 30-year average of 159.6.

Tom Saal, vice president at INTL FC Stone, in his work with Market Profile said, “Weekly Market Profiles show higher-priced untested Value Areas to be tested.” He expects the market to test last week’s value area at $4.453 to 4.581 before moving on and “eventually” testing $4.654 to $4.758. “Back years, Cal’15, Cal’17 & Cal’19 are getting oversold; buyers be ready.”

In overnight Globex trading August crude oil fell 55 cents to $105.19/bbl and August RBOB gasoline shed 2 cents to $3.0534/gal.