March natural gas is set to open 3 cents higher Thursday morning at $3.16 as traders see short-term bullish conditions in the form of near-term weather coupled with an expected government report showing usage above historical norms. Overnight oil markets rose.

Forecasters are predicting a slight cooling trend, but heating requirements remain less than average. “[Thursday’s] six-10 day period forecast is on average cooler than yesterday’s forecast over the eastern half of the U.S.,” said WSI Corp. in a Thursday morning report to clients. “CONUS GWHDDs are up 3.2 to 121.6 for the period, [but] these are 14.3 below average.

WSI said confidence in the forecast was average as the medium-term models were in good agreement, but “a potential amplified flow and PNA [Pacific North America] correlations offer a warmer risk over the West and Front Range, but a colder risk over the southern and eastern U.S.”

Thursday’s Energy Information Administration storage report may be the last significant withdrawal for a while and precede a growing year-on-five-year storage surplus. Last year 91 Bcf was withdrawn, and the five-year average comes in at 138 Bcf. ICAP Energy calculated a pull of 157 Bcf, and Citi Futures was figuring on a decline of 160 Bcf. Industry consultant Bentek Energy, utilizing its flow model, predicted a pull of 149 Bcf, and a Reuters poll of 23 traders and analysts showed an average 153 Bcf with a range of -124 Bcf to -172 Bcf.

In spite of being able to hold $3 technical support, market technicians versed in Elliott Wave and retracement analysis see the market heading lower. “Bullish case, $3.006 marked the end of (C) in an ABC pattern down from the $3.994 high,” said Brian LaRose, an analyst with United ICAP. “Bearish case, this low merely represents the end of wave ”1’ of (C). At this time we are inclined to favor the latter. So for now at least, we will be labeling any sideways to higher prices as corrective in nature. To indicate something more bullish is taking hold would require a breach of $3.383-3.390.”

In overnight Globex trading March crude oil gained 57 cents to $52.91/bbl and March RBOB gasoline rose 2 cents to $1.5742/gal.