September natural gas is set to open 2 cents higher Wednesday morning at $3.92 as traders consider whether the seasonal cycle low might be in. Overnight oil markets rose.

Analysts saw bargain hunting as contributing to [Tuesday’s] advance. “In our view, the gains were primarily technical in nature, but may also reflect the idea that prices have fallen to a level that represents more of a fundamental bargain,” said Tim Evans of Citi Futures Perspective in closing comments Tuesday. “There is also potential for an intermediate term seasonal rally, with prices firming back up ahead of the winter heating season.

“Expectations for Thursday’s DOE storage report for the week ended Aug. 1 have also walked somewhat lower, with early editions of the major newswire surveys pegging the consensus at 85-88 Bcf in net injections. We note this would still be well above the 50 Bcf five-year average, an extension of the recent bearish storage trend. With our model projecting a slightly higher 90 Bcf build, we also see at least some risk of a minor bearish surprise.”

According to Evans’ figures, “the year-on-five-year average storage deficit will continue its established bearish trend, with the year-on-five-year average deficit that was as much as 1,010 back on April 18 shrinking to 494 Bcf by Aug. 22. The declining deficit shows the market continuing to become better supplied on a seasonally adjusted basis, a bearish fundamental trend. While we are friendly to the idea of natural gas establishing a seasonal bottom, we also think it may take more than one try for it to turn the corner.” forecasts only low to moderate cooling requirements for the next seven days. In its Wednesday morning report it said, “The northern U.S. will see several weather systems track through with areas of showers and cooler than normal temperatures. However, the southern U.S. will see gradual warming, including the high use states of Texas, California, Oklahoma and Florida, with highs reaching the 90s and 100s while combining with high humidities for regionally strong cooling demand. The northern U.S. will warm up into the 80s next week and push demand to moderate.” calls any market impact “low” with “cooler than normal U.S. temperatures and large EIA (Energy Information Administration) weekly builds.”

For the week ended Aug. 9, the National Weather Service forecasts below-normal accumulations of cooling degree days (CDD). New England should see 40 CDD, three fewer than normal, and the Mid-Atlantic should see just 48 CDD, or nine fewer than its seasonal tally. The Midwest from Ohio to Wisconsin was expected to experience 44 CDD or 10 fewer than normal.

The National Hurricane Center in its 5 a.m. EDT report Wednesday said Tropical Storm Bertha had moved rapidly to the northeast and was located 400 miles south southwest of Halifax, Nova Scotia. It was moving to the northeast at 28 mph, and winds were at 50 mph.

In overnight Globex trading September crude oil rose 23 cents to $97.63/bbl and September RBOB gasoline gained a penny to $2.7380/gal.