February natural gas was set to open about 4 cents lower at around $3.012 Wednesday as weather models overnight showed some heating demand losses in the second and third week of the outlook.

With brutal below-normal temperatures sweeping across the Midwest, East Coast and South, futures gapped up over the New Year’s holiday, then traded in a wide range before settling Tuesday at $3.056, about 10 cents higher.

NatGasWeather.com said in a note to clients Wednesday that the overnight model runs turned up warmer.

"Both the Global Forecast System and European weather models were a little milder with a system over the East Jan. 9-11, milder Jan. 12-14 over the central U.S. in the amount of cold air arriving, and then quite warm versus normal with the pattern Jan. 16-18," the firm said.

"Essentially a loss of some heating degree days (HDD) and demand in both major models overnight, although with numerous flip-flops the past few days."

In the near-term, forecasts show plenty of gas demand.

"Dangerously cold Arctic air will cover much of the country east of the Rockies into the weekend," the firm said, "aided by a reinforcing Arctic blast arriving late Wednesday through Saturday" resulting in temperatures potentially falling to -25 F in parts of the Northern U.S. and lows in the 20s in the South.”

Analysts with Tudor, Pickering, Holt & Co. (TPH) said in a note to clients Wednesday that natural gas is "sitting pretty at $3 heading into an anticipated strong print Thursday and a few more weeks of frosty winter. HDD data for the last week came in around 15% above previous forecasts and around 30% above five-year norms" leading to estimates for a much larger than normal withdrawal.

TPH noted higher-than-normal HDDs expected for the week ahead and government forecasts showing some potential colder-than-normal temperatures the week after that.

"Spiking weather demand, coupled with production freeze-offs, likely sees natural gas continue its mini-rally into 2018, before increased production jostles the support for the commodity," the analysts said.

February crude oil was set to open about 42 cents higher at around $60.79/bbl Wednesday, while February RBOB Gasoline was up about a penny at around $1.7759/gal.