March natural gas is expected to open 3 cents higher Thursday morning at $2.86 as overnight weather forecasts edged colder and traders look beyond this week’s expected release of modest gas usage figures. Overnight oil markets fell hard.

Overnight weather models leaned to the cooler side. WSI Corp. in its Thursday morning six- to 10-day outlook said, “[Thursday’s] forecast is similar, if not a bit colder on average across the CONUS when compared to yesterday, due in part to the day shift. The period forecast only added four HDDs (heating degree days). Confidence in the overall forecast is average as medium-range models are in good agreement with the large-scale pattern. However, there are still plenty of technical and localized model differences, which hampers confidences levels on a daily basis.

“The general risk during the period is to the colder side due to an amplified pattern and another arctic outbreak, which may be followed by a southern stream storm system.”

This week’s storage report is expected to be a tempered affair, with a modest 110 Bcf or so draw on the docket. With this week’s cold, however, early estimates for next week’s report of more than 200 Bcf are in the mix.

For the week ended Feb. 13, Citi Futures Perspective comes in on the low end of the spectrum with a 96 Bcf estimate, and United ICAP calculates a 113 Bcf pull. Bentek Energy’s flow model figures on a withdrawal of 109 Bcf. Last year, a stout 247 Bcf was withdrawn, and the five-year average is for a 181 Bcf pull.

Next week’s report looks to be a humdinger. Next week Evans forecasts a pull of 240 Bcf and says what is likely to be a storage surplus, year-on-five-year will “move back out to a deficit of 118 Bcf as of Feb. 27 before slipping again to 104 Bcf as of March 6. While this prospect hasn’t been enough to spark short-covering so far, we do see potential for a run back up to the $3.20 area last seen in mid-January over the next week or two.”

Evans recommends holding a long April position from $2.83 with a protective sell-stop at $2.57 to limit initial risk on the trade.

In overnight Globex trading, March crude oil tumbled $2.07 to $50.07/bbl and March RBOB gasoline dropped 4 cents to $1.5360/gal.