Natural gas futures pushed higher Tuesday amid bullish changes in the medium-term weather outlook and talk of a record pull from storage inventories. Meanwhile, a thaw in the Northeast dropped cash prices there Tuesday; with mostly small moves elsewhere, the NGI National Spot Gas Average gave up 22 cents to $3.20.

The prompt month finished on a high note after some selling earlier in the day. February settled 8.8 cents higher at $2.923 after trading as low as $2.825. March settled 8.0 cents higher at $2.852.

The weather story of the day was the afternoon European guidance, which was more enthusiastic on a pair of cold shots arriving in the six- to 10-day period, Commodity Weather Group meteorologist Jason Setree told NGI.

“The operational European actually came in quite a bit stronger,” Setree said, while the ensemble was less intense “but did confirm the changes.”

Shortly after the close, February briefly pushed above $2.960.

Powerhouse Vice President David Thompson said Tuesday’s move higher “still seems to be within a market that’s more bearish than bullish.” He pointed to the recent intraday high of $3.097 recorded last week, which came as bone-chilling temperatures were blasting much of the eastern two thirds of the country.

“The coldest weather we’ve had in three winters — at least two full seasons — was good for about a 53-cent rally, and not one that could last more than four or five days,” Thompson said. “Is that a significant rally? Sure, but that’s the strongest blast of winter we’ve had in several seasons…I’m not a big believer that Tuesday’s pop is signaling a new bullish trend change.”

According to Bespoke Weather Services, “With recent colder trends in medium-term guidance and a slower Madden Julian Oscillation progression favoring a continuation of these colder trends over the next day or two, we do think it is possible that resistance gets hit with small heating demand additions, especially given speculation around Thursday’s Energy Information Administration (EIA) data print.

“Yet medium-term heating demand additions with a cold snap are primarily short-term, and the long-term pattern, though not featuring quite as much warmth, still looks to favor heating demand destruction across the eastern half of the country,” Bespoke said.

While next week’s cold shots could lift natural gas demand, last week’s bitter cold may have led to a record pull from U.S. gas stocks. Estimates have been suggesting EIA could report a potential record-setting 300 Bcf-plus storage withdrawal for the week ending Jan. 5.

The Desk’s Early View survey released late last week showed on average estimates for a 329.7 Bcf withdrawal. Stephen Smith Energy Associates updated its weekly estimate Tuesday to show a withdrawal of 316 Bcf, while PointLogic Energy called for a withdrawal of 325 Bcf.

Genscape Inc. said Tuesday its “preliminary composite estimates for the EIA week ending Jan. 5 storage report are calling for a withdrawal of 353 Bcf.

“Our formal estimate is a composite of our daily supply and demand (S&D) and pipeline storage facility sample,” the firm said. “Our S&D model is showing implied storage activity of -345 Bcf, based on a demand estimate totaling 826 Bcf for the week at the same time nearly 20 Bcf of production was restricted to freeze-offs.

“To further contextualize the magnitude of this week’s anticipated -353 Bcf draw, it is helpful to note that polar vortex record pull was notably higher than the previous high it bested,” Genscape added. “Prior to winter 2013/14’s polar vortex event, the previous withdrawal high was -267 Bcf back in January 2010.”

Meanwhile, in its latest Short-Term Energy Outlook, released Tuesday, EIA slashed its 2018 Henry Hub price forecast to $2.88/MMBtu, down 24 cents versus last month’s report. EIA now expects natural gas production in 2018 to average 80.4 Bcf/d, a 6.9 Bcf/d year/year increase — which would count as the highest year/year increase on record.

Midday weather data Tuesday “was slightly colder Jan. 16-19, a little milder Jan. 20-23, but then mixed on if cold can return into at least portions of the eastern U.S. around Jan. 24-25,” said NatGasWeather.com in a note to clients.

In the medium-term outlook, “a colder trending series of weather systems will arrive into the central U.S. late this week through early next week, while also advancing more aggressively into the East after tapping a heftier does of frigid air out of Canada, where lows will drop to -15 to 15 degrees across the northern U.S., with 20s and 30s into the South and Southeast,” the firm said.

Until then, “milder temperatures will spread across the southern and eastern U.S. the next few days where highs will reach the 40s and 50s over the Mid-Atlantic and Northeast, with 60s and 70s over the South and Southeast,” NatGasWeather said.

With cities like Boston and New York thawing out this week after last week’s Arctic chill, spot prices retreated further Tuesday. Algonquin Citygate dropped $5.10 to average $10.02, a far cry from prices averaging as high as $78.98 during last week’s demand spikes.

Last Thursday’s record-high $175/MMBtu spot price at Transco Zone 6 New York came as Williams was seeing record volumes on the Transcontinental Gas Pipe Line.

Along the same lines, on Tuesday utility Con Edison said its customers “set several records for natural gas usage” late last week.

“Con Edison customers in New York City and Westchester County used 1.42 million Dth of gas on Saturday, beating the record of 1.37 million Dth set just the day before,” the utility said. “Customers also set six new hourly records for gas demand on Saturday. Usage topped out at 62,750 Dth in the hour ending at 7 p.m., making that the new hourly record.”

Con Edison said the totals did not include gas sent to electric generators.

In the PJM Interconnection footprint, which includes states in the Mid-Atlantic and Appalachia, the grid operator said Tuesday the period from Dec. 27-Jan. 7 “brought three of PJM’s top 10 highest winter peak demands for electricity.”

Following the polar vortex influenced 2013/14 winter, “PJM worked with our members to better prepare to meet the demands of the system in cold weather,” said Vice President Mike Bryson, who is in charge of operations. “We implemented the Capacity Performance construct’s strict standards for resources, strengthened communications with gas pipelines and improved preparation coordination with members.

“Member companies also made modifications to improve equipment performance,” he said. “In the end, we saw better availability of resources during the extreme cold.”