March natural gas is set to open 4 cents lower Thursday morning at $3.13 as weather models retreated from Wednesday's cooler outlook and traders anticipate government storage figures to show low usage for this time of year. Overnight oil markets were mixed.

Weather models continue to flip-flop and overnight model runs took back most of Wednesday's expected cooling. "The largest losses are in Week 3, [and] this reversal is creating downward price pressure in trading early this morning," said Andy Weissman, president of EBW AnalyticsGroup in a morning note to clients.

Thursday's Energy Information Administration (EIA) storage report for the week ending January 27 is expected to show withdrawals only about 50% of normal. Last year 169 Bcf was pulled and the five-year pace is for a 166 Bcf decline. IAF Advisors calculates a pull of 83 Bcf and industry consultant Bentek Energy is looking for a withdrawal of 84 Bcf. A Reuters poll of 20 traders and analysts showed an average draw of 88 Bcf with a range from 70 Bcf to 115 Bcf.

Weissman is looking for a pull of 85-88 Bcf and "There is a significant risk though that the withdrawal will disappoint. Near-term, the market could receive at least some support from cold weather currently spreading across the U.S. and from another shot of cold air expected late next week.

"Both episodes, however, are expected to be brief, followed by much warmer air. Our most likely Week 4 forecast is also strongly bearish, suggesting that downward price pressure could continue later this month."

Forecasts of heating load continue to fall short of the mark. The National Weather Service (NWS) for the week ended Feb. 4 predicts that New England will see 269 HDDs (heating degree days) or 12 fewer than normal, and the Mid-Atlantic is expected to endure 253 HDDs or 8 less than its seasonal tally. The greater Midwest from Ohio to Wisconsin is anticipated to shiver under 269 HDDs or 20 less than its seasonal norm.

In overnight Globex trading March crude oil gained 10 cents to $53.98/bbl and March RBOB gasoline fell a penny to $1.5729/gallon.