October natural gas is expected to open 2 cents higher Tuesday morning at $2.71 as traders factor in still-warmer temperature projections and lean toward a bullish posture. Overnight oil markets plummeted.

MDA Weather Services in its morning six- to 10-day outlook said, “The forecast trends warmer today in the Midcontinent, which is a response to slower and weaker push of cooler temperatures into the region. Above-normal temperatures are expected for most locales in the eastern half, including the Mid-Atlantic and Northeast, where temperatures peak in the upper 80s to the near 90 F around mid-period. Overall, this period is cooler versus conditions in the one- to five-day period, but it remains quite warm relative to the 10- and 30-year PWCDD normals. Variability continues to highlight the forecast in the West, where a seasonal outlook is favored.”

MDA added that risks to the forecast include the ECMWF (European model) “shows a hotter pattern in the eastern half, with potential for MAs in the Midwest and Northeast. The West could be cooler based on biased corrected model data.”

The soaring petroleum complex is not likely to influence natural gas much, and “gas will remain heavily influenced by the weather and despite some hot temperatures expected across the eastern half of the nation within the next couple of weeks, the advanced stage of the CDD cycle and lack of significant storm threat to the GOM infrastructure is precluding sustainable price rallies,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients Monday.

“The market could receive its usual dose of volatility come Thursday with the release of the EIA storage report. But we feel that a seasonal injection roughly 20 Bcf above average builds for the fourth week of August has been appropriately discounted. For now, we are maintaining a bullish stance as we continue to advise purchases of October futures at around current levels for an expected trading turn up to about the $2.85 area. This remains a market conducive toward option-writing strategies designed to collect premium.”

Tropical Storm Fred was 225 miles northwest of the Cape Verde Islands the National Hurricane Center said in its 8 a.m. EDT Tuesday report. Winds had lessened to 65 mph, and the storm was headed west-northwest at 12 mph. Projections showed the storm headed east of Bermuda.

In overnight Globex trading October crude oil fell $1.57 to $47.63/bbl and October RBOB gasoline tumbled 6 cents to $1.4390/gal.