Natural gas futures added a few pennies in early trading Friday as the market mulled signs of tightening balances following the latest round of government inventory data, while forecasts continued to hone in on mild February temperatures. 

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The March Nymex contract was up 3.9 cents to $2.495/MMBtu at around 8:30 a.m. ET.

The overnight weather data produced only minor changes to the temperature outlook, according to NatGasWeather. The firm noted ongoing disagreement between the cooler American dataset and the European model starting next week and extending into mid-February, though both models remained “quite bearish” during this time frame.

“There will still be bouts of chilly air into the West and Plains next week but not cold enough or widespread enough to counter temperatures being 10-30 degrees warmer than normal most elsewhere,” NatGasWeather said. 

Making the outlook “exceptionally bearish,” the latest data maintained warmer than normal conditions for days 15 to 16 of the outlook, according to the firm. “Some of the weather data finally shows colder air advancing into the U.S. Feb. 20-28,” but this is “quite far out and where large changes are likely.”

In terms of inventories, the forecast warmth could push the storage surplus to the five-year average to more than 250 Bcf, potentially near 300 Bcf, NatGasWeather added.

The Energy Information Administration (EIA) on Thursday reported a 151 Bcf withdrawal from U.S. natural gas storage during the week ending Jan. 27. The report also included an upward revision to the prior week’s inventories, from 2,729 Bcf to 2,734 Bcf.

Total working gas in underground storage for the Lower 48 stood at 2,583 Bcf as of Jan. 27, 163 Bcf (plus-6.7%) higher than the five-year average, according to EIA.

Based on pre-report surveys, the 151 Bcf print in the latest EIA report surpassed consensus expectations for a withdrawal in the neighborhood of 140-145 Bcf.

“Compared to degree days and normal seasonality, the reported withdrawal appears loose by around 1.7 Bcf/d versus the prior five-year average,” Wood Mackenzie analyst Eric Fell said in a note to clients early Friday.

Analysts at Tudor, Pickering, Holt & Co. (TPH) estimated less than 1 Bcf/d of oversupply in the market on a weather-adjusted basis for the week, versus more than 3 Bcf/d oversupplied in the previous four weeks.

The analysts highlighted “supply declines across the Lower 48 and a bounce in industrial demand” as key drivers of the tightening balances.

“Through another week of Henry Hub coming under pressure, the latest supply dynamics and further incremental positives toward a much anticipated restart at Freeport have done little to prop up pricing” in the face of a weak February degree day outlook, the TPH analysts said.