August natural gas is expected to open 5 cents higher Thursday morning at $2.89 as weather models turned slightly more constructive overnight. Petroleum markets rose.

MDA Weather Services in its morning 11- to 15-day client forecast said, “The forecast trends slightly warmer in the East at mid-period while continuing to favor pattern variability across the Eastern Half. This lends near normal temperatures for the region overall, while areas farther west from the Plains points west see aboves persisting.

“Within the atmospheric background is a MJO [Madden Julian Oscillation] signal tracking across its Pacific phases, phases which correlate with cooler variability from the Midwest to the East this time of year. However, a warmer signal associated with the +AO [Arctic Oscillation] is a limiting factor behind the cooler MJO. Confidence remains lowest from Midwest to East due to these mixed indicators.”

MDA also reported that Tropical Depression 4 has formed in the central Atlantic and is expected to continue to move west-northwest before weakening this weekend as it crosses to the north of the Leeward Islands. It noted that conditions were quiet elsewhere and put the threat to Gulf production facilities at 0%.

Tim Evans of Citi Futures Perspective saw Wednesday’s 11 cent price plunge as the result of “near-term temperature outlook trend[ing] cooler, subtracting some cooling demand from the current fundamental equation.”

Early estimates of Friday’s storage report, delayed one day by the holiday, are falling within a tight range. The Desk’s Early View survey of analysts sampled 14 traders and the average was 63 Bcf, greater than last year’s 38 Bcf and about in line with the five-year average of 66 Bcf.

The range on the survey was from 52 Bcf to 70 Bcf.

Tom Saal, vice president at FCStone Latin America LLC in Miami in his work with Market Profile said, “The recent sell-off has produced two Market Profile Double Distribution Trend Days separated only by Tuesday’s holiday. Trend Days infer ‘exhaustion’ in the direction of the price move — could be near the end of this down cycle.”

Saal looks for the market to test Wednesday’s value area at $2.900 to $2.832 and “eventually” test $2.988 to $2.972.”Maybe” the market tests $3.100 to $3.066.

In overnight Globex trading August crude oil rose 75 cents to $45.88/bbl and August RBOB gasoline gained 2 cents to $1.5219/gal.