August natural gas is expected to open 3 cents higher Tuesday morning at $2.93 as traders see the near 15-cent loss of weather premium over the last two sessions as adequate for the moment. Overnight oil markets rose.

Traders see a moderate front half of August priced into the market with Friday and Monday’s combined 14 cent swoon, but any further advance will need some sustained hot weather thereafter. “We see the dynamic of supply surplus contraction intact through a couple more EIA (Energy Information Administration) releases that will be providing some background support,” said Jim Ritterbusch of Ritterbusch and Associates in a morning report to clients. “But, at the same time, the market will require a shift in the forecasts back toward some broad based hot temps next month if price advances are to be sustained. With the summer gradually winding down and with September futures acquiring prompt month status at week’s end, the weather factor will become less impactful.”

He added that “the recent sharp reduction in the supply surplus will sensitize the market to any unforeseen supply disruptions that could emanate from tropical storm activity into the Gulf of Mexico, pipeline mishaps, etc. We will also note that production has been slow to respond to the dramatic increase in the rig counts during the past year and with the pace of growth in the rigs showing signs of plateauing, the production factor would appear deserving of a bullish designation.”

Forecasters are calling for a warm west and cool east with a return of warmth to the East. in its morning eight- to 15-day outlook said, “The western, central and southern U.S. will be hot with highs of upper 80s to 100s due to strong high pressure. Weather systems will sweep across the east-central US early in the outlook with showers and cooling, then warming after.

The National Weather Service (NWS) is forecasting reduced cooling loads in Midwest and eastern markets. For the week ended July 29 NWS forecasts New England will see 31 cooling degree days (CDD) or 14 fewer than normal. New York, New Jersey, and Pennsylvania are expected to experience 60 CDD or just 1 greater than average, and the greater Midwest from Ohio to Wisconsin is anticipated to endure just 65 CDD or 7 greater than its seasonal tally.

In overnight Globex trading September crude oil gained 75 cents to $47.52/bbl and September RBOB gasoline added a penny to $1.5454/gal.