Cooler-trending forecasts over the weekend, including moderating near-term heat, helped pressure natural gas futures several cents lower in early trading Monday. The August Nymex contract was off 2.5 cents to $1.693/MMBtu at around 8:45 a.m. ET.

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Bespoke Weather Services said its forecast shifted cooler over the weekend, with models weakening near-term heat. Total projected gas-weighted degree days (GWDD) for the week ending Friday declined to 93 as of early Monday, down from over 100 just a few days ago, the forecaster said.

“This week, similar to what we saw last week, has moved notably cooler compared to what it looked like a week ago,” Bespoke said. “…The bias of the modeling has been to forecast too much heat, especially in the Midwest. For this reason, we have undercut the projected GWDD in the modeling even beyond this week.

“We remain confident in a hotter-than-normal pattern continuing on into August, but the model bias remains a glaring one.”

Analysts at EBW Analytics Group said they’re expecting further weakness in natural gas following last week’s price action.

Given the “inability to rally despite a bullish storage report and the expected arrival of the hottest days of the summer this past weekend,” last week may have “marked a turning point” for prices, suggesting that “the chance for a major move up this summer” has passed, the EBW analysts said. 

However, “this does not mean that prices will head straight down,” they said. “While futures are trading lower this morning, weather in many parts of the country is still expected to be brutally hot on most days for at least the next two to three weeks, supporting the fall-month contracts. Prices are also likely to bounce higher on days on which support holds.”

The seasonal decline in cooling degree day totals by August could create an opening for further price declines before the end of the summer, the EBW team said.

From a technical standpoint, ICAP Technical Analysis analyst Brian LaRose told clients that the focus will be on support to start the week.

“Bulls have three options if they want to keep natural gas confined to this year’s trading range,” LaRose said. “Those options for support are $1.678-$1.673, $1.620-1.604 and $1.537-1.517. As for the bears, they will need to force natural gas beneath these three bands to have a chance at restoring the down trend. For now, we prefer a neutral posture.”

August crude oil futures were down 35 cents to $40.24/bbl at around 8:45 a.m., while August RBOB gasoline was off about 1.5 cents to $1.210/gal.