January natural gas was set to open about 4 cents higher at around $2.734 Wednesday, erasing most of the prior day's losses as the market continues to look forward to a swell of late-month heating demand.

MDA Weather Services said in its latest six- to 10-day outlook that it expects "coverage of much and strongly below normal temperatures in parts of the Rockies, Plains, Midwest and East, with changes from Tuesday being additionally colder in the East as the polar vortex tracks near the region in the mid-period.

"However, a disturbance has the South Central being warmer in the mid-period."

Bespoke Weather Services said the overnight weather guidance "lost a couple of gas-weighted degree days, but that comes after extremely impressive forecasts yesterday afternoon, and small changes in guidance are expected. Generally, the forecast remains the same, with very impressive cold expected over the next two weeks.

"...Our sentiment remains slightly bullish from Tuesday evening as prices rose slightly overnight but have really been struggling to take out $2.75 resistance," Bespoke said. "Almost any time of the heating demand season these forecasts would be very bullish, but with the bulk of the cold looking to come over two holiday weekends we see demand estimates being hit some."

Predictions for Thursday's Energy Information Administration storage report point to a withdrawal much larger than the week before and a far cry from the small injection reported two weeks ago.

Stephen Smith Energy Associates is calling for a 175 Bcf draw from U.S. gas stocks for the week ended Dec. 15, based on 16 total degree days more than normal for the period. That's versus a seasonally normal draw of 145 Bcf (based on 2006-2010 norms), the firm said.

PointLogic Energy estimated that EIA would report a 172 Bcf draw for the period. "The significant increase in week-on-week withdrawals comes amid demand gaining nearly 18.5 Bcf/d week-on-week," analysts said in a note to clients.

After remaining range-bound for so long, when natural gas broke below $2.75 "there should have been more enthusiasm to the downside given how long that range was in place," Powerhouse President Elaine Levin told NGI Wednesday. "That's just a flashing yellow sign for the bears, I would say.

"...Even with the higher production, weather could" see the market take out $2.75-2.80 resistance and "bring us right back into the range again," she said. "That's the price of this market. The sell-off is short-lived and then you move right back into the trading range."

February crude oil was set to open about 27 cents higher at around $57.83/bbl Wednesday, while January RBOB gasoline was up about 1.4 cents to around $1.7108/gal.