August natural gas is expected to open 5 cents lower Wednesday morning at $2.71 as the technical environment weakens and the weather outlook holds mostly steady. Overnight oil markets fell again.

Near-term weather forecasts edged slightly cooler. “Details continue to be challenging over the next two weeks as we track a seasonal to hot national pattern overall,” said Commodity Weather Group in its morning report. “There is plenty of energy embedded in the jet stream flow to create thunderstorm (cooler) complications that offset otherwise hotter risks in this pattern type. We see some hotter East Coast shifts in the short-range (mid-upper 90s for Mid-Atlantic late this week) with some cooler Midwest adjustments.

“[Wednesday’s] six-10 day edged very slightly cooler for the East Coast, Deep South including Texas, as well as the Western U.S., while the 11-15 day inched slightly hotter for many of these same areas,” said Matt Rogers, president of the firm.

Fundamental market factors are still intact. “The updated temperature forecast was modestly cooler than on Friday but still features mostly warmer than normal conditions over the next two weeks,” said Tim Evans of Citi Futures Perspective in closing comments. “This suggest[s] that Tuesday’s drop in natural gas was primarily a correction to its valuation rather than a shift in its underlying fundamentals.”

Evans is forecasting a 46 Bcf build in Thursday’s storage report, sharply lower than last year’s 85 Bcf injection and a five-year average of 78 Bcf.

Market technicians see the petroleum complex dragging natural gas lower. “[T]he case for further upside has been put in jeopardy by the close below $2.826,” said Brian LaRose, a market technician at United ICAP, after the market closed. “Now it is up to the bears to confirm a top of some kind is in fact in place. To do that bears need to push natgas beneath the 0.236 retracement at 2.671 and swing the technicals in their favor. Suspect if the rest of the petro complex continues to slide from here that should not be difficult.”

Tom Saal, vice president at FCStone Latin America in Miami in his work with Market Profile said to expect the market to test Tuesday’s value area at $2.801 to $2.757 and then move on to test $2.912 to $2.886 or $2.739 to $2.717, but he wasn’t sure in what order. “Recent price volatility makes price direction difficult — just ‘go with’ next move,” he said in a morning note to clients.

In overnight Globex trading August crude oil fell 59 cents to $46.01/bbl and August RBOB gasoline gave up 4 cents to $1.3896/gal.