September natural gas is set to open 2 cents higher Tuesday morning at $2.61 as traders note only modest cooling in extended weather forecasts. Overnight oil markets gained.

Traders are not expecting much in the way of further gains. “We are not expecting much upside follow-through from the modest overnight price gains as this market appears stuck in a comparatively narrow range that will likely be sustained through the rest of this week,” said Jim Ritterbusch of Ritterbusch and Associates in a Tuesday morning note to clients.

“Some mild temperature trends toward month-end have likely been priced in and the late stage of the CDD cycle is reducing the impact of daily updates to the one- to two-week temperature forecasts. These items have been efficiently priced via the drop in nearby futures of roughly 10% earlier this month. Additionally, the supportive dynamic of supply surplus contraction remains much intact and is apt to be furthered on Thursday. We will be looking for a seasonal injection of 28 Bcf that would compare with year ago and five-year average builds of around 57 Bcf.

“However, the peak cooling season is now in the rear view mirror and the market will be looking ahead to the upcoming shoulder period following expiration of the September contract later next week. Meanwhile, risk to the production forecasts going forward would appear bearish rather than bullish as the upside acceleration in the rig counts may force adjustments.”

Forecasters are calling for cooler temperatures over the central U.S. “Near to below average period anomalies are forecast to persist over much of the central U.S. during the 11-15 day timeframe,” said WSI Corp. in its Tuesday morning outlook. “Above average warmth is expected over the West and the East Coast. Today’s forecast is a touch cooler over the south-central U.S. and a little warmer over the northern Rockies. CONUS PWCDDs are down 0.6 for days 11-14 to 45.7 for the period.

“A persistent amplified flow and blocking offer a cooler risk across the central U.S. The West could run even warmer.”

The National Hurricane Center reported a system about 500 miles west-southwest of the Cabo Verde Islands that is gradually becoming better defined. It gave the system a 70% chance of forming a tropical depression in the succeeding 48 hours.

In overnight Globex trading September crude oil rose 41 cents to $46.15/bbl and September RBOB gasoline added a penny to $1.4124/gal.