August natural gas is set to open 3 cents lower Thursday morning at $2.96 as traders focus more on near term temperature moderation and less on expected supportive government storage data. Overnight oil markets were narrowly mixed.

Overnight weather models lost some heat. “Forecast changes were in the cooler direction along the northern tier resulting from a still active regime into the Midwest,” said MDA Weather Services in a morning six- to 10-day forecast to clients. “Despite this, most of the Midwest averages on the warm side of normal, with temperatures expected to peak in the upper 90s and near 100 in St. Louis through mid-period when ridging is strongest overhead.”

MDA added that “the Southeast trends hotter versus previous expectations and averages the period at marginally above seasonal norms. Above normal temperatures remain in place in California and the Rockies, while the seasonal monsoon in the Southwest has confidence remaining lower there.

“Still hotter risks are seen in the mid-period from the Southern Midwest to the Mid-Atlantic and points South, and slightly hotter risks in the Southwest are due to model biases with storm coverage.”

Tim Evans of Citi Futures Perspective saw Wednesday’s decline as a possible reaction to estimates of today’s 10:30 a.m. EDT Energy Information Administration (EIA) storage report becoming somewhat greater. “The market gave back more than half of Tuesday’s gains during Wednesday’s session as traders were quick to take profits at the higher levels,” he said. ” A shift in consensus expectations for Thursday’s DOE storage report from 55-58 Bcf a day ago up to 59 Bcf may have contributed to the pullback, although the expected net injection for the week ended July 7 would still be less than the 72-Bcf five-year average for the date.”

A year ago 61 Bcf was injected.

Evans estimates a build of 55 Bcf, somewhat lower than the consensus. Wells Fargo comes in at 56 Bcf and Raymond James is looking for an injection of 65 Bcf. A Reuters survey of 24 traders and analysts revealed an average 59 Bcf with a range of +43 Bcf to +65 Bcf.

In overnight Globex trading August crude oil fell 3 cents to $45.46/bbl and August RBOB gasoline lost a penny to $1.5164/gal.