The expiring January natural gas contract was set to open about 5 cents higher Wednesday at around $2.697 amid only small changes to forecasts calling for below-normal temperatures across much of the country the next 10 days and warming after that.
The February contract was set to open about 6 cents higher at around $2.715.
"No major changes are made to the forecast" for the 11-15 day period, MDA Weather Services said in a morning note to clients. "Above normal temperatures are forecast in the Plains and Midwest while belows early on along the East Coast give way to above normal temperatures late in the period, which averages near normal.
"Confidence, however, comes down slightly given the colder projections among guidance and the risk for larger gas-weighted heating degree day gains if the forecast pattern transition is slower to occur."
Even with frigid temperatures arriving over the holiday and remaining in the medium-range outlook, "it's still not cold enough for natural gas," Price Futures Group senior energy analyst Phil Flynn said. "It's a war between record demand versus record U.S. production. That battle played out Tuesday, and so far, it seems like record production and new pipelines are giving the bears a bit of an edge, yet that may change as the U.S. draws will start to rise."
Predictions have been rolling in for Thursday's storage inventory report from the Energy Information Administration (EIA), showing another triple-digit withdrawal could be in play for the week ending Dec. 22. Last week EIA reported a 182 Bcf withdrawal.
Stephen Smith Energy Associates, in a report issued over the holiday weekend, predicted a 107 Bcf withdrawal. The firm said this compares to a seasonally normal draw of 82 Bcf, based on 2006-2010 norms.
PointLogic Energy on Tuesday predicted a withdrawal of 111 Bcf, pointing to higher production week/week and a decline in demand "spread across the middle and eastern half of the country" for the period.
February crude oil was set to open about 39 cents lower at around $59.58/bbl Wednesday, while January RBOB Gasoline was trading about 1.9 cents lower at around $1.7676/gal.