The expiring August futures are expected to open a penny lower Thursday morning at $2.91 in spite of production data coming in less than forecast. Overnight oil markets were narrowly mixed.

Adding luster to the bullish case, production figures continue to come in below government forecasts. According to Energy Information Administration (EIA) figures, total marketed production January 2017 tallied 71.27 Bcf/d, and by January 2018 production is forecast to reach a stout 77.41 Bcf/d. Current production isn’t anywhere close to that.

Industry consultant Genscape in a morning report noted that lower 48 production remains below 73 Bcf/d in line with the Spring Rock Forecast, and although “Lower 48 production has shown modest upticks in the past few days, volumes have failed to break above 73 Bcf/d since that mark was achieved earlier this month. On July 13, production hit 73.1 Bcf/d, cresting the 73 Bcf/d mark for the first time since February 2016. Since the 13th, however, Spring Rock’s Daily Pipe Production estimate has estimated volumes have averaged 72.67 Bcf/d, including falling as low as 72.26 Bcf/d on the 14th.”

EIA forecast July 2017 production at 74.81 Bcf/d.

“That said, the failure to bust through the 73 Bcf/d-level is not totally surprising and production is coming in pretty close to Spring Rock forecasted levels,” Genscape said. “On the month production has averaged 72,597 MMcf/d versus the Spring Rock forecast of 72,698. Texas and Gulf Coast volumes are coming in about 300 MMcf/d and 180 MMcf/d, respectively, below expectations, while offshore Gulf of Mexico volumes are coming in about 300 MMcf/d higher than forecast.”

Production as well as consumption will be on the minds of traders with the 10:30 a.m. EDT release of inventory data. Last year 20 Bcf were injected and the five-year pace stands at 47 Bcf. This week’s estimates portray a continued shrinking in the long-term surplus.

ION Energy predicts a storage build of 21 Bcf and Raymond James calculates a 32 Bcf increase. A Reuters survey of 24 traders and analysts revealed an average 24 Bcf with a range of +17 Bcf to +32 Bcf.

In overnight Globex trading September crude oil fell 30 cents to $48.45/bbl and September RBOB gasoline rose fractionally to $1.5959/gal.