February natural gas was set to open Wednesday about 3 cents higher at $2.959, helped by bullish adjustments to the outlook for Arctic cold expected move in next week.

After a roughly 10-cent rally leading up to Tuesday’s close, the prompt was able to hold onto those gains overnight.

“The forecast once again sees colder changes” in the six- to 10-day period, “and focused in the mid- to late-period as temperatures are slower to moderate across the Midcontinent and East,” said MDA Information Systems in a morning note to clients. “This comes as Arctic high pressure diving into the Central U.S. at the start of the period is additionally stronger, carrying strongly below-normal temperatures into the Midwest in the early and belows to the East from mid- to late-period.

“However, the Arctic connection wanes as the period progresses thanks to a deepening Gulf of Alaska low tracking toward the West, where above normal temperatures will be enhanced prior to its arrival.”

NatGasWeather.com said overnight data “held on to colder trends for the middle of next week as cold blasts over the East are seen lingering another day” while further out “the data was mixed for after Jan. 23.

“…We continue to expect the weather models to flip-flop between warmer and colder trends for Jan. 23-26, and while far from cold, the markets must see it as cold enough to warrant such a strong move Tuesday and so far overnight,” the firm said. “To our view, these milder breaks could be overlooked as long as cold follows the last week of January into February, which the data has been teasing but has yet to fully come on board with.”

While next week’s cold shots could lift natural gas demand, the bitter cold earlier this month may have led to a record pull from U.S. gas stocks. Estimates have been suggesting EIA could report a potential record-setting 300 Bcf-plus storage withdrawal for the week ending Jan. 5.

Powerhouse’s David Thompson, vice president, on Wednesday said the bears still appeared to have control even after the latest rally.

“If you saw prices get back above $3.05, I think you’d see producers come in and sell it on the back end, and I think you’d see traders comes in and take profit at that point,” Thompson told NGI.

According to ICAP Technical Analysis analyst Brian LaRose, “So far, natural gas has managed to hold above $2.681-2.646. Unfortunately, merely holding support is not enough to boost our confidence in the possibility of a late seasonal run to the upside.

“Once again, it all comes down to the bull’s ability to lift natural gas above key resistance,” LaRose said. “We still peg $3.089-3.113 as the gatekeeper. We have no business entertaining a greater recovery unless this zone can be exceeded.”

February crude oil was set to open about 49 cents higher at around $63.45/bbl, while February RBOB gasoline was up about 1.3 cents at $1.8489/gal.