February natural gas futures were trading 8.2 cents higher at $3.066/MMBtu shortly before 9 a.m. ET Thursday as forecasters continue to see signs of colder temperatures arriving later this month.

Bespoke Weather Services viewed the overnight guidance as mostly unchanged, but the forecaster did note trends in the European model to suggest it is coming into better alignment with the colder American model.

“This may be the beginning of models finally closing the chasm in their Week 2 output, and we see increasing support for a stronger cold shot moving in for Week 3 as well,” Bespoke said. “...Our sentiment once again remains slightly bullish as we see increasing confidence in Week 3 cold combine with balances that are tight and cash prices that should be stronger yet again today.”

With European guidance “finally showing more consistent cold risks through Week 2,” there’s increasing confidence that gas-weighted degree days could rise to above-average levels later this month, a development that would be “all this tight market needs to rally,” according to the firm.

Meanwhile, estimates for Thursday’s Energy Information Administration (EIA) storage report, due out at 10:30 a.m. ET, have been pointing to a double-digit withdrawal for the week ended Jan. 4, which would pale in comparison to the massive pull recorded around this time last year.

A Bloomberg survey of market participants as of Wednesday afternoon showed a median estimate for a 72 Bcf withdrawal, with predictions ranging from minus 25 Bcf to minus 100 Bcf. A Reuters survey pointed to a 76 Bcf pull, with a range of estimates from minus 50 Bcf to minus 115 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Wednesday at a withdrawal of 78 Bcf.

A year ago, EIA reported a record-setting 359 Bcf withdrawal for the week ended Jan. 5, 2018, a period that saw intense cold drive huge price spikes along the East Coast. Based on available EIA historical data, the five-year average for the period is a withdrawal of 182 Bcf. As of Wednesday, EIA had not updated its calculations to show historical comparisons for storage weeks in 2019.

“The draw will be much smaller than the five-year average to again provide a nice improvement in deficits,” NatGasWeather said. “...This is another tricky draw to predict due to the New Year’s holiday and after last week’s surprising draw of only 20 Bcf.”

As for the overnight weather data, the forecaster said the Global Forecast System (GFS) continued to show a “notably colder” pattern for the Jan. 20-24 period compared to its European counterpart, which didn’t show frigid polar air over Canada pushing as aggressively into the United States.

“The European model trended a little colder over the past 24 hours but still isn’t nearly as cold or intimidating as the GFS, holding the cold pool at the border,” NatGasWeather said. “If the European was a little colder, weather sentiment would likely swing to at least somewhat bullish...To take $3 and hold it might require a decent draw versus expectations for the EIA storage report and having the early morning and midday weather data see solid cold potential Jan. 20-25, especially the GFS model that remains the most intimidating/coldest of the datasets.”

February crude oil futures were trading 42 cents lower at $51.94/bbl shortly before 9 a.m. ET, while February RBOB gasoline was trading fractionally lower at $1.4242/gal.