September natural gas is expected to open 4 cents lower Friday morning at $2.76 as traders looking out towards mid-month see temperatures still trending cooler. Overnight oil markets were narrowly mixed.

Overnight weather models turned moderately cooler. “[Friday’s] 11-15 day period forecast is a little cooler than the previous forecast over the western and northern U.S.,” said forecaster WSI Corp. in its morning 11- to 15-day report to clients. “The southern states are a bit warmer.” Continental United States (CONUS) population-weighted cooling degree days “are down 1.3 for Days 11-14 and are forecast to be 48.3 for the period. These are 1.7 below average.”

WSI added that confidence in the forecast was a bit lower than normal due to spread within model details and magnitude. At present there are a couple of low pressure systems in the Atlantic and tropical activity could be a wild card.

“The case can be made for risks in many directions. Changes with the upstream Pacific pattern and the GFS with its tropical system offer a warmer risk over the eastern two thirds of the CONUS and a cooler risk along the West Coast,” WSI said.

Although Thursday’s thin storage addition of just 20 Bcf further contracted the long term supply surplus, analysts see short-term weather as the primary market driver.

“This market is being forced into new low territory as a result of bearish updates to the short-term temperature views,” said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients. “Consensus of forecasts continue to favor below to much below normal patterns across a broad portion of the country with only modest offsets in regions that are not major consumers. These forecasts that could soon be stretching through the third week of August are being prioritized over the ongoing narrowing in the long-standing supply surplus.

“[We] expect slippage to about the $2.65 area before major support begins to develop. Although yesterday’s EIA release appeared price neutral, the supply surplus narrowed further and is likely to see additional contraction to around 75 Bcf with next week’s report. But, for now, this static supply side factor is being overruled by the daily dynamic of adjustments to the short term temperature views. Yesterday’s shift suggesting extension of unusually cool and broad-based patterns has proven to be sufficient to force further incursion of speculative capital into the short side.”

In overnight Globex trading September crude oil fell 13 cents to $48.90/bbl and September RBOB gasoline rose fractionally to $1.6365/gal.