August natural gas is set to open 4 cents lower Wednesday morning at $3.01 as traders temper their expectations of pervasive heat, and technical resistance looms. Overnight oil markets rose.

Weather models overnight shaved some of the expected heat in near-term forecasts. WSI Corp. in its six- to 10-day morning report to clients said the “period forecast is generally a bit warmer than yesterday’s forecast over the southern U.S., but the remainder of the continental United States is cooler or not as hot. As a result, Continental United States population-weighted cooling degree days are down 1 to 67.7 for the period, which are 11.8 above normal.

“Forecast confidence has improved and is a little better than average for a change as medium range models are in good agreement with the evolution of the mid-high latitude flow. There is a minor hotter risk over portions of the southern and eastern U.S. during the back half of the period.”

For the first two trading days of the week August futures have added over 18 cents, but that has yet to really catch the attention of technical analysts who still see seasonality in play. “Have seen several measures of longer term support hold this past week,” said Brian LaRose, analyst at United ICAP.

“On top of that, the longer term technicals are starting to display hints of bullishness. However, I would emphasize, it is far too soon to abandon the case for a deeper seasonal decline. For now we will be treating any rally as countertrend in nature.”

LaRose says he still has several candidates for resistance in the range of $3.10 to $3.30.

With stout technical resistance above the market, and new government price forecasts, the bulls have their work cut out for them.

For a second consecutive month, the Energy Information Administration (EIA) has lowered its natural gas price forecast, saying it expects Henry Hub spot prices to average $3.10/MMBtu this year and $3.40/MMBtu next year.

Those price forecasts, including in EIA’s latest Short-Term Energy Outlook (STEO), are both down from last month, when EIA forecast prices averaging $3.16/MMBtu this year and $3.41/MMBtu in 2018. The May STEO included forecasts of $3.17/MMBtu in 2017 and $3.43/MMBtu next year.

In its Early View survey of traders The Desk found an average 58 Bcf as the estimated storage build for Thursday’s EIA inventory report from a sample of 12 traders. Last year 61 Bcf was injected and the five-year pace stands at 72 Bcf. The range on the estimates was from 50 Bcf to 74 Bcf.

In overnight Globex trading August crude oil rose 64 cents to $45.68/bbl and August RBOB gasoline gained a penny to $1.5285/gal.