March natural gas was set to open Thursday about 10 cents lower at around $2.910, with overnight guidance still advertising a warmer February outlook and the 10:30 a.m. EDT release of government storage data expected to show a lighter withdrawal.

“Overnight model guidance only continued recent warm trends, as we have yet to see any reversal in the long-range model movements that brought about this most recent wave of natural gas selling,” Bespoke Weather Services told clients Thursday morning. “A cold shot around Feb. 8-9 still looks to be rather strong, and we see risks that that my trend a bit stronger in the coming days, but other than that the long-range does not look to feature nearly the heating demand we once expected it to.

“…With production at record highs and the market still quite loose it is clear we need some kind of bullish catalyst to help prices cover at all,” Bespoke said.

Thursday’s Energy Information Administration (EIA) storage report “is expected to be quite bearish, which could pressure the market a leg lower,” but the firm is also looking for a possible bounce on “a round of profit taking by shorts if any afternoon guidance increases colder risks or EIA data does not miss bearish.”

Predictions for this week’s EIA release have been pointing to a much smaller withdrawal versus the 288 Bcf pull reported last week.

The average taken from a Reuters survey of traders and analysts showed the market expecting a 104 Bcf withdrawal. That’s versus a year-ago withdrawal of 92 Bcf and a five-year average -160 Bcf. Responses ranged from -90 Bcf to -120 Bcf.

PointLogic Energy on Monday estimated a 91 Bcf withdrawal for the week ending Jan. 26. Kyle Cooper of ION Energy estimated a pull of 111 Bcf. Stephen Smith Energy Associates revised its estimate to a withdrawal of 101 Bcf from a 98 Bcf pull, versus a seasonally normal draw of 159 Bcf based on 2006-2010 norms, according to the firm.

From a technical standpoint, analyst Brian LaRose of ICAP Technical Analysis wondered after Wednesday’s selling if it was “just a sharp corrective retreat? Or is this a new downtrend being established?

“It all comes down to whether or not the March contract can hold above the dense cluster of support stretching from $2.802-2.640,” LaRose said. “Carve out a bottom and the bulls will have a chance to salvage the case for greater recovery. Fail to carve out a bottom and $2.189-2.121 becomes our primary downside target.”

Analysts with Rafferty Commodities Group said on Wednesday the market “took out and closed below major support levels we had listed at $3.090, $3.060 and $3.035” causing “us to change our outlook on the market.” The analysts said they’re now looking to “the horizontal line at the $3.020 area, which was previously support, to now act as resistance.”

March crude oil was set to open about 61 cents higher at around $65.34/bbl, while March RBOB gasoline was up fractionally at around $1.8949/gal.