October natural gas is expected to open a penny lower Friday morning at $4.03 as forecasters tweak their outlooks to the cooler side. Overnight oil markets rose.

Analysts see the market capable of a testing Thursday’s highs in the near term. “[T]he market’s ability to post highest levels since July 17th improved the chart picture with the bullish momentum of the past couple of weeks capable of a re-visit by October futures to [Thursday’s] highs of $4.10,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Thursday to clients.

“A renewed burst of strength could also develop off of continued warm temperature views that are now extending beyond the first third of next month. While we have emphasized that hot temperatures in September tend to pack limited pricing punch, a significant downsizing in storage injections on Sept. 11th will still be a force with which to be reckoned. With today’s data, the supply deficit against five-year average levels has shrunk to 16.5% from a shortfall of around 50% that existed at around the end of last winter. Despite next week’s expected warm-up, we still look for average weekly deficit contraction of about 1% that would keep storage on track to approach the 3.6 Tcf level by early November. Much of our forecast remains predicated on a continued quiet hurricane season that will accommodate production at or near record levels.

“Overall, we have shifted from a short-term neutral posture to a bearish stance as we suggest holding any short October positions established at around the $4.04 area today. We are advising stop protection above $4.20. But at the same time, we also suggest holding deferred bull spreads employing the December 2014 contract as long leg against spring 2015 contracts.”

Other traders favor the buy side. Tim Evans of Citi Futures Perspective suggests working a buy order on the October contract at $3.68 with stop-loss protections at $3.48 should the order get filled.

Power buyers across the broad MISO footprint may be scaling back on weekend purchases as the weather outlook favors a cool incursion. WSI Corp. in its Friday morning outlook said, “A complex frontal system will support areas of rain and storms during the next couple of days, which will support variable temperatures. This initial system should depart during Sunday, but a better-defined cold front and round of rain and storms may gradually slide across the power pool late in the weekend into early next week. Severe weather is possible. Rainfall totals may range 1-3 inches-plus.”

Wind generation could spike. “Unsettled weather will support variable wind generation during the next couple of days. Output may occasionally top out around 3 GW. The expected cold front may support a sharp boost in wind generation during Saturday night through Sunday. Output may spike up over 5 GW.”

In overnight Globex trading October crude oil added 44 cents to $94.99/bbl and October RBOB gasoline gained a half cent to $2.5981/gal.