February natural gas is set to open 12 cents higher Thursday morning at $3.45 as traders discount expected government data showing low usage and focus on upcoming forecast weather patterns. Overnight oil markets were narrowly mixed.
Overnight weather model runs resulted in a complex series of changes favoring cooler temperatures in the East. "A mix of detailed changes were made to the forecast in this [six- to 10-day] period, with Texas being warmer late while the East Coast is colder in the mid-period," said forecaster MDA Weather Services in its Thursday morning report to clients. "Pattern wise, this period features a buildup in ridging over Alaska, but that feature's colder influence is tamed by an eastern Pacific low tracking inland around mid-period.
"This feature will allow for a coverage of above normal temperatures in the Central U.S., but a round of high pressure from mid to late period in the East has temperatures averaging the period near and marginally below seasonal norms there. Confidence remains moderate overall."
The 10:30 a.m. EST release of inventory figures by the Energy Information Administration (EIA) is expected to show far lesser withdrawals than last week's 243 Bcf. For the week ended Jan. 20, estimates are coming in around 115 Bcf, far less than last year's 202 Bcf pull and a five-year average of 176 Bcf.
Ritterbusch and Associates is looking for a pull of 102 Bcf, and IAF Advisors calculates a decline of 115 Bcf. A Reuters survey of 18 traders and analysts showed an average 117 Bcf withdrawal with a range of -102 to -135 Bcf.
Industry consultant Bentek Energy predicts a withdrawal of 115 Bcf utilizing it flow model and said, "A dramatic swing in temperatures compared to the previous week moved storage activity significantly, with significant declines in withdrawals in the south central, East and Midwest regions week-over-week. Residential/commercial demand declined an estimated 11.6 Bcf/d compared to the previous week, while power burn demand fell 4.4 Bcf/d week over week.
In overnight Globex trading March crude oil rose 35 cents to $53.10/bbl and March RBOB gasoline fell fractionally to $1.5495/gal.