March natural gas was set to open Tuesday about 7 cents higher at around $2.624 as weather models trended colder overnight in the outlook for late February.

Bespoke Weather Services said overnight guidance showed the potential for changes in the North Atlantic Oscillation (NAO) “to gradually erode the strong southeastern ridge and return some colder risks to the eastern portion of the country.” Forecasters see the ridge strengthening rapidly two times, once around Feb. 19-20 and again around Feb. 23.

“However, after Feb. 23 all model guidance shows” a forming NAO pattern that would “break down that ridge with colder weather spreading into the East, and by the end of the month heating demand rising back to around average looks likely,” Bespoke said. “That combines with cold risks through much of the next two weeks across the middle of the country to at least put a floor in demand as well, unlike last year where the entire country was warm.”

NatGasWeather.com also noted colder trends overnight from both the Global Forecast System (GFS) and European models for the period after Feb. 24.

“We still see potential for colder conditions over the western and central U.S. to finally shift eastward at the end of the month into early March, which both the GFS and European models teased could happen,” NatGasWeather said.

Gas prices “could always sell off further, but with storage deficits expected to remain larger than -350 Bcf through the end of the month, even with the coming milder spell, there’s still ample time for prices to rally if colder patterns are able to show back up in the weather maps” later this month as the overnight data suggested.

Predictions for Thursday’s Energy Information Administration storage inventory report have been pointing to a withdrawal in the high 100s for the week ending Feb. 9.

Stephen Smith Energy Associates revised its estimate higher Tuesday to a withdrawal of 183 Bcf. That’s versus a seasonally normal withdrawal of 147 Bcf based on 2006-2010 norms, according to the firm. PointLogic Energy called for a withdrawal of 179 Bcf.

In terms of technicals, ICAP Technical Analysis analyst Brian LaRose on Monday pegged $2.521 as “the only candidate for support I have left” before $2.189-2.121.

“If we are going to get any sort of bounce before reaching $2.189-2.121, this is where that pop should occur,” LaRose said. “Hold $2.521 and we may have to wait until April rolls into the spot position to have a shot at this target.” If it fails to hold $2.521, “expect a drop before March rolls off the board.”

March crude oil was set to open about 61 cents lower at around $58.68/bbl, while March RBOB gasoline was down about 1.8 cents to around $1.6601/gal.