January natural gas was set to open about a nickel higher just before 9 a.m. ET Thursday as slightly stronger cold risks showed up at the end of weather models, nudging the prompt month higher in what could be another volatile session leading up to its expiration.

The Nymex January gas futures contract was trading at $3.600, up 5.7 cents, as overnight European weather model guidance showed slightly more cold risks at the end of the run but still indicated a generally mild pattern winning out before then as gas-weighted degree days (GWDD) easily run below seasonal averages, according to Bespoke Weather Services.

Overnight Global Ensemble Forecast System (GEFS) model guidance was decently warmer, sending gas prices initially lower before the more bullish ending on the European guidance, which indicated more of a negative Eastern Pacific Oscillation ridge upstream that could lock cold in the East.

“This is a trend we do expect models to gradually move towards into next week, but we also note that GEFS guidance has been breaking this ridge down occasionally and limiting eastern cold,” Bespoke chief meteorologist Jacob Meisel said.

Although Bespoke sees risk skewed colder beyond Jan. 10, weather models “are still noisy and struggling” to show much cooler weather with the gradual Madden-Julian Oscillation progression.

Recent and coming weather patterns are expected to lead to storage withdrawals that are lighter than five-year averages for the next two Energy Information Administration weekly storage reports, according to NatGasWeather. The expected pulls would improve deficits from 720 Bcf to near 620 Bcf, then stall or improve a little further in the weeks after, the firm said.

“Deficits will still be quite hefty, but for the markets to regain the bullish fire, the markets clearly want sustained cold, which the overnight weather data failed to provide due to notable breaks between cold shots. If prices were to rally today, colder trending overnight weather data likely wouldn’t be given as the reason,” NatGasWeather said.

Indeed, any strength in the January contract primarily could be attributed to what has been a pattern of very strong contract expiries in the current trading environment, Bespoke said.

“Though the strength seen in the December contract expiry is highly unlikely, there still appear to be enough cold risks in January to combine with the current storage deficit to let the January contract expire with strength,” Meisel said.

But cash prices have been soft recently and balances loose, and while cash prices should improve some over the next couple of days as colder weather begins to return, a strong bounce for Thursday was not expected. Meanwhile, production has returned to near highs, “which can help keep prices softer, and we still are not seeing weather model guidance as bullish enough to break prices back up above the $3.75 level.

“Instead, any expiration strength is short-term as prices likely bounce around at these lower levels before mid-January cold can eventually move them up,” Meisel said.

Crude oil futures were trading more than 30 cents lower at $45.88/bbl, and RBOB gasoline futures were trading about a penny lower at $1.32/gal.