Traders shrugged off somewhat weaker heat in the latest forecasts to send natural gas futures a few cents higher early Friday. The July Nymex contract was up 2.4 cents to $3.065/MMBtu at around 8:50 a.m. ET.

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Updated forecasts early Friday showed an overall drop in demand expectations for the next 15 days, marking a third straight day/day decline, according to Bespoke Weather Services. The firm’s latest projections showed heat moderating for the eastern half of the nation.

“It is still strong, mind you, just a little off the level depicted in the last couple of days,” Bespoke said. “…Demand after next week tails off, as the best heat relocates to the Rockies/Plains, but this shift simply moves us closer to normal.” 

Meanwhile, the Energy Information Administration (EIA) on Thursday reported a 98 Bcf injection in natural gas storage inventories for the week ending May 28. The print was slightly above the 96 Bcf five-year average build, but came in below both last week’s 115 Bcf injection and the 103 Bcf injection recorded in the year-ago period.

“Despite yesterday’s EIA number confirming the weaker supply/demand balances reflected by the prior two numbers, and three days in a row of minor forecast demand losses, the bulls remain in control,” Bespoke said. “Some of that may be due to…expectations for a much stronger number next week, as there appears to be a large sentiment in favor of a smaller injection versus yesterday’s 98 Bcf tally.”

Looking ahead to next week’s EIA report, analysts at Tudor, Pickering, Holt & Co. (TPH) said their preliminary modeling points to a build of 83 Bcf, slightly below seasonal norms.

In a research note Friday the firm highlighted imports from Canada as an “often overlooked” data point that could prove important for balances this summer.

Canadian imports “dropped to a year-to-date low of 3.9 Bcf/d this week compared to our modeled 4.5 Bcf/d,” the TPH analysts said. “This will be a dynamic worth tracking as Western Canadian storage currently sits at a 14% deficit to the five-year average, and based on our current modeling we see inventories exiting 2021 at a 15% deficit.”

This creates the potential for cross-border flows from Canada to underperform modeling as storage there “gobbles up the available molecules,” according to TPH. Based on recent AECO pricing for the third quarter “uncommitted volumes are currently price incentivized to remain in-basin rather than be exported.”

July crude oil futures were up 47 cents to $69.28/bbl at around 8:50 a.m. ET, while July RBOB gasoline was up around a penny to $2.2101/gal.