Strong heat this week and the prospect of more to come in August helped natural gas futures to keep climbing in early trading Monday. The August Nymex contract was up 9.1 cents to $4.151/MMBtu at around 8:50 a.m. ET. September was up 8.6 cents to $4.128.

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After breaking through resistance at the $4 mark last week, natural gas futures continued to surge higher early Monday, analysts at EBW Analytics Group noted. 

Futures were “racing higher” on a combination of “the hottest weather of the summer expected to extend nationwide tomorrow and the potential for record electricity demand” for Texas grid operator ERCOT (aka the Electric Reliability Council of Texas), factors that could drive sharp natural gas demand gains, the EBW analysts said.

Looking at the updated 15-day forecast outlook, the Global Forecast System, which had been hotter than the European model, trended cooler over the weekend for the period from Friday through Aug. 5, according to NatGasWeather. The European model, meanwhile, on Sunday shed a few cooling degree days for the first week of August, the firm said.

“After widespread heat this week, cooler trending weather systems across the Great Lakes and East” this weekend into next week “will ease demand to seasonal levels,” NatGasWeather said. “However, the weekend weather data favors hot high pressure over the west-central U.S. shifting eastward Aug. 5-8, increasing coverage of highs into the 90s for the potential for strong national demand returning.”

The EBW analysts described the weather outlook exiting the weekend as “complex.” Demand losses were focused in the six- to 10-day window, according to the firm.

“Losses in the European model were particularly steep Sunday,” but the model “regained most of its Sunday losses overnight, and both models now call for a return of hotter weather starting Aug. 6,” the EBW analysts said. “If the forecast for hot weather continues, the market could look past the early August cool spell and hold on to most of its recent gains.”

Meanwhile, looking ahead to Thursday’s Energy Information Administration (EIA) storage report, NGI is modeling a 49 Bcf injection for the week ended July 23. If realized, such a build would compare bearishly to historical norms.

Last year, EIA recorded a 27 Bcf build for the similar week, and the five-year average is an injection of 28 Bcf.

September crude oil futures were down 15 cents to $71.92/bbl at around 8:50 a.m. ET.