Natural gas futures advanced early Monday as traders factored in continued strong summer cooling demand and the upcoming front-month expiration. The August Nymex contract, set to roll off the board later this week, was up 16.9 cents to $8.468/MMBtu as of around 8:40 a.m. ET. September was up 13.0 cents to $8.325.

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Weather models shed cooling demand over the weekend, including the American model, which had entered the weekend hotter than its European counterpart, according to the NatGasWeather. 

The American dataset dropped 4 cooling degree days from its projections over the weekend, showing weather systems over the Midwest, Ohio Valley and New England that would result in “less extreme” national demand over the next week, the firm said.

“While the pattern over the next seven days isn’t as hot as last week, nor as hot as the data once advertised, there will still be hot conditions and strong demand across the western U.S., southern U.S. and the Mid-Atlantic Coast, including highs of 90s and 100s across the Pacific Northwest,” NatGasWeather said. 

Overall, the first seven days of the outlook period were “slightly to moderately bullish” in the latest model runs entering Monday’s trading, with days eight through 15 remaining “solidly bullish,” especially in the American model, according to NatGasWeather.

Bulls enter the new trading week with the momentum as the market focuses on “intense heat” expected to arrive during the second week of August, according to EBW Analytics Group senior analyst Eli Rubin.

“On the supply side, dry gas production pushed higher over the weekend,” Rubin said. “Intra-month pipeline nomination trends suggest elevated likelihood of gains at the end of July, with the potential for record high production figures within the next week.”

Trader positioning ahead of the looming expiration of the August contract is likely to drive price action early this week, according to the analyst.

“Many shorts have already fled the market, leading to enhanced volatility risks,” Rubin said. “A steep, overdue correction lower is likely after August rolls off the board.”

From a technical standpoint, bulls overcame the .618 retracement level in Friday’s session, ICAP Technical Analysis observed in a note to clients.

Now “the only obstacle standing in the way of an upside breakout is the big cluster of resistance stretching from $8.606 to $9.115,” ICAP analyst Brian LaRose said. “So watching intently to see if the bears can prevent this major area of contention from being breached.”