July natural gas is set to open a penny higher Friday morning at $3.04 as traders digest Thursday’s positive market response to an otherwise bearish storage report and weather forecasts for next week continue hot. Overnight oil markets were narrowly mixed.

Overnight weather models continued with a warm theme with cooling loads expected to be above average. “[Friday’s] 11-15 day period forecast is warmer than yesterday’s forecast over the West and adjacent portions of the central and southern US,” said WSI Corp. in a morning report to clients.

“The Northeast is a touch cooler. [Continental United States population-weighted cooling degree days] are up 1.5 for Days 11-14 and are now forecast to be 53.3 for the whole period, which are 10.9 above average.

“The case can be made for risks in either direction. The northern tier and East have a slight cooler risk, while the West and south central US have the potential to run a touch hotter.”

Analysts see a firm market for the near term. “This market’s ability to work higher in spite of a much larger than expected supply injection attests to a firm undertone that is being facilitated by some warmer temperature forecasts,” said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients.

“Although the expected above normal temps appear limited mainly to the northeast quadrant, deviations from normal are beginning to appear sufficient to drive a renewed contraction in the supply overhang. And while yesterday’s 12 Bcf expansion in the supply surplus is likely to be followed by another slight increase in the overhang with next week’s EIA, this trend appears temporary.

“Furthermore, warm weather views within heavily populated regions at this early stage of the CDD [cooling degree day] cycle tend to prompt an exaggerated price response. This show of support is likely sustainable at least for another 2-3 days given some expected hot Midwest temperatures that are likely to strengthen the cash basis in setting the stage for ultimate gain up into the 3.20-3.25 zone.”

In overnight Globex trading July crude oil fell 8 cents to $45.56/bbl and July RBOB gasoline rose fractionally to $1.4922/gal.