August natural gas is expected to open a penny higher Friday morning at $2.97 as traders see forecast weather sufficiently supportive to maintain at least a temporary price equilibrium. Overnight oil markets rose.

Little change was reported in overnight weather model runs. “The 6-10 day period forecast is generally warmer than yesterday’s forecast over portions of the central and eastern US,” said WSI Corp. in its morning report to clients. “The West is cooler.” Continental United States population-weighted cooling degree days “are up 0.6 to 68.8 for the period, which are 12.8 above normal.”

Inasmuch as agreement between weather models was considered good, overall forecast confidence is average with the evolution of the mid-high latitude flow and pulse of hot weather early in the period. “However, model spread and uncertainty with wet weather causes confidence levels to decrease as the period progresses.”

In spite of the generally warm weather forecast, “expected deviations from normal don’t appear sufficient to support nearby gas futures much above the $3.00 mark for now,” said Jim Ritterbusch of Ritterbusch and Associates in a morning report to clients. “But while today’s trade is off to a soft start, we expect seller caution ahead of a weekend that could bring some significant adjustments to the 1-2 week temperature outlooks. The storage excess against five year averages narrowed to 172 Bcf with yesterday’s data with the overhang likely to narrow toward 150 Bcf with next week’s numbers given this week’s warm temps. But while yesterday’s supply numbers offered some reinforcement to our near term bullish view, the market will require some additional hot weather beyond next week if our $3.12 upside price target is to be achieved.”

Ritterbusch says he is holding on to a bullish outlook for now and his upside target is quite reasonable at just $3.12 per nearby futures. “Any bullish updates to the weather views this weekend could expedite price movement toward our target. But we will also note that the physical market is having difficulty gaining any bullish traction as it softened again yesterday back to below the 2.95 level amidst milder Midwest temperature patterns.”

In overnight Globex trading August crude oil rose 55 cents to $46.63/bbl and August RBOB gasoline gained 2 cents to $1.5229/gal.