January natural gas is expected to open 5 cents lower Thursday morning at $3.49 as an expected government report showing above-average usage is not able to offset moderating near-term weather forecasts. Overnight oil markets fell.

Overnight weather models moderated. "The latest 6-10 day forecast features a moderating trend across the CONUS," said WSI Corp. in its Thursday morning report to clients. "[Thursday's] forecast is generally warmer than yesterday's forecast. As a result, CONUS GWHDDs are down 5.8 to 141.5 for the period. These are now 8.3 below average.

"The forecast has minor risks in either direction given the model spread with the details of a couple of potential storm systems. There is slight cooler risk along the East Coast and Southwest, but the south-central U.S. could run even warmer by the end of the period."

The current storage surplus stands at a stout 254 Bcf based on five-year averages, but the ongoing cold has analysts thinking that excess could be gone by the end of the year. Tim Evans of Citi Futures Perspective sees triple-digit withdrawals taking that surplus to a deficit of -6 Bcf by Dec. 30.

Looking at Thursday's report last year, 46 Bcf was withdrawn and the five-year average stands at a 79 Bcf pull. This time around, however, three-banger pulls are the order of the day. Raymond James estimates a withdrawal of 117 Bcf, and Stephen Smith Energy calculates a draw of 134 Bcf. A Reuters survey of 21 traders and analysts shows an average 128 Bcf decline with a range of -114 Bcf to -144 Bcf.

In overnight Globex trading January crude oil fell 55 cents to  $50.49/bbl and January RBOB gasoline shed a penny to $1.5241/gal.