Bullied by winter weather — both outside their windows and in the latest forecasts — futures traders were quick to react Wednesday morning as they propelled natural gas prices above the $3.00 mark for the first time since November. In dramatic fashion, the January contract not only gapped higher on the open, but also gapped above psychological support at $3.00. However, after posting its $3.02 opening trade, the market fell lower throughout the session as traders looked apprehensively to today’s release of fresh storage data. The prompt month settled with a slim, 1.6-cent advance at $2.911, more than a dime off its high for the session.

While futures traders enjoyed their four-day weekend, Old Man Winter was hard at work, prompting meteorologists around the country to revise their holiday-week forecasts. After not even receiving an inch of snow during the month of November for the first time since the city began recording data, the Buffalo, NY region was slammed with a storm Monday and Tuesday that produced several feet of snow in some areas. Looking ahead, forecasts call for more of the same. According to the latest six- to 10-day forecast released by the National Weather Service yesterday, below normal temperatures are expected to continue for the eastern half of the nation through at least Jan. 4.

Looking further out on the weather horizon, Jon Davis of Salomon Smith Barney does not rule out the possibility of “a major league Arctic airmass in about 2 weeks.” Until then, he looks for temperatures from the Rockies to the East Coast to oscillate between close-to-normal on the warm days to as much as 8-12 degrees below-normal on the cold days. “The current pattern looks very stable and shows all signs of being the dominant pattern well into January,” he wrote in his daily natural gas and heating oil outlook.

The American Gas Association will announce updated storage numbers today at 2 p.m. EST, a day later than usual to give the association more time to compile the data after the long holiday. Expectations ahead of that report call for a net withdrawal of 50-70 Bcf, slightly more than the 42 Bcf from a week ago, but well below last year’s 175 Bcf draw. Next week the comparison is an even more daunting 209 Bcf takeaway. The five-year average withdrawal for this time of year is 139 Bcf.

For today, the New York Mercantile Exchange, Inc., has announced it will extend trading in its natural gas futures and options contracts to 2:45 p.m. EST from its regular closing time of 2:30 p.m. because of the late storage data announcement. The rescheduling of the AGA announcement coincides with the expiration of the January natural gas futures contract. The Exchange had previously announced that trading in natural gas futures and options would be extended until 2:45 whenever the expiration of natural gas futures occurs on a Wednesday, the regular release date of the AGA report.

On its expiration day, January has resistance initially at yesterday’s $3.02 high. Further selling is likely up to the $3.20 spike etched on Nov. 28. On the downside, January suffered a blow when sellers took the prompt month back down to fill in yesterday’s gap-higher open. Nevertheless, modest support exists at Friday’s high of $2.91. A breach of that level could trigger a slide to the bottom of the Dec. 20-21 chart gap down to $2.70, chartists agreed.

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