July natural gas is expected to open 3 cents higher Wednesday morning at $3.07 as weather forecasts heat up and technical factors have lost some of their bearish luster. Overnight oil markets fell.

Forecasters see model trends heading in the direction of greater heat in key population centers. “For yet another day, the model momentum continues in the hotter direction with net demand increases across the board, focused on the heat event next week from the Midwest to the East Coast,” said Matt Rogers, president of Commodity Weather Group, in a morning report to clients.

“Just like the episode from middle May, this high-pressure heat ridge spike travels north across the Midwest to the Northeast, leaving the South largely out of it and threatening a few days where the Northeast could be hotter than the Middle Atlantic. Rain risks seem really low in the East early next week but start to pick up by Wednesday onward to start to pull back the heat a bit; however, humidity should remain moderate to high so that every day next week is considerably hotter than the current. Otherwise, the models are favoring a return of western hot ridging in the 11-15 day that trends the Midwest to South and then East cooler for the 11-15 day.”

Bulls may be able to find some solace in that even with the recent dive in July futures, forecasters are calling for only a modest adjustment to 2017 and 2018 pricing. New natural gas export capabilities and growing domestic consumption will help Henry Hub natural gas spot prices increase from an average of $3.16/MMBtu this year to $3.41/MMBtu in 2018, according to the Energy Information Administration’s (EIA) latest Short-Term Energy Outlook(STEO).

Those estimates are down marginally from EIA’s previous STEO, which included forecasts of $3.17/MMBtu in 2017 and $3.43/MMBtu next year.

Since more deferred contracts seem to be holding ratio support levels, analysts are thinking prices may move higher. “At this time, I would be inclined to treat any such price action as a pause in the down trend though,” said Brian LaRose, an analyst with United ICAP. His figures show that if the bulls can’t muster enough momentum to push prices higher, the July contract could easily trade down to the mid $2.80s.

In overnight Globex trading July crude oil fell 52 cents to $47.67/bbl and July RBOB gasoline shed 2 cents to $1.5325/gal.