As the latest forecast advertised a slightly more moderate look to widespread above-normal temperatures expected over the next two weeks, natural gas futures were trading close to even early Wednesday. The August Nymex contract was up 0.4 cents to $1.750/MMBtu at around 8:45 a.m. ET.

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Citing gas-weighted degree day (GWDD) losses in the medium range and in the near term, Bespoke Weather Services said its latest 15-day forecast early Wednesday came in slightly cooler overall compared to Tuesday’s outlook.

Total GWDD for the current week ending Friday “are now under 90, after being projected as high as 104 at one point,” Bespoke said. “This illustrates the difficulty the models are having regarding intensity of heat. It is absolutely a hot pattern, still on pace to match or edge out July 2011 for the highest July GWDD total on record, but models keep projecting too much heat in the medium range, with this week being the prime example.

“Next week’s upper level pattern looks stronger, and the pattern should remain biased hotter than normal into August, so weather definitely is not bearish by any means. Models just may continue to overshoot some at times, given recent biases.”

Meanwhile, weak U.S. liquefied natural gas (LNG) feed gas demand has continued to apply downward pressure to prices. 

Tudor, Pickering, Holt & Co. (TPH) estimates showed LNG imports into Europe down 35% month/month in June. This has helped to ease pressure on plump storage levels on the continent, but TPH analysts said in a note to clients Wednesday they expect further depressed import levels will be required to keep inventories from filling too quickly.

“On the supply side, the flexibility inherent in U.S. tolling models is placing the burden of rebalancing the market squarely on America’s shoulders, and they are answering, contributing 63% of the global supply reduction in June,” the TPH analysts said. “…Our global supply-demand balances indicate U.S. utilization will need to be in the 31% range to balance the market in July, with a modest improvement to 36% in August.”

From a technical perspective, there are two possibilities to account for recent price action, according to ICAP Technical Analysis analyst Brian LaRose.

“Either natural gas is correcting the move up from $1.517, or the down trend has resumed,” LaRose said in a note to clients. “For the latter to be possible the bears must force the August contract beneath $1.672, $1.604 and the $1.517 low. Until/unless this can be accomplished we are forced to treat any near term weakness as corrective.”

For the bulls, they will have to take out resistance at $1.924-1.943 to “have a shot at higher prices,” the analyst said.

August crude oil futures were up 56 cents to $40.85/bbl at around 8:45 a.m. ET, while August RBOB gasoline was up about 2.6 cents to $1.2730/gal.