With overnight guidance moderating the extreme cold expected in the near-term while advertising the potential for more long-range chills, February Nymex natural gas futures were trading 4.9 cents lower at $3.050/MMBtu shortly before 9 a.m. ET Friday.

Bespoke Weather Services viewed the overnight data as “decently warmer,” with models backing off on the intensity of a cold blast to close out January. This would also keep cold “less entrenched for any ensuring warm-up” and allow gas-weighted degree days (GWDD) to more easily return to average levels, according to the forecaster.

However, the models also were consistent in returning a negative Eastern Pacific Oscillation ridge in days 13-15 of the outlook period, which “should help return more significant cold across the country into the middle of February,” Bespoke said. “Though the trends overnight were thus bearish, we see risks for more GWDD additions moving forward given a favorable long-range pattern for significant cold shots...we do not see the overnight trends as overly bearish, even though we lost a decent chunk of GWDDs, and on net GWDDs easily run above average from here.”

Meanwhile, the Energy Information Administration (EIA) on Thursday reported a 163 Bcf withdrawal from natural gas stocks for the week ended Jan. 18, on the bullish side of major surveys but smaller than the five-year average 185 Bcf pull and the 273 Bcf withdrawal EIA recorded in the year-ago period.

Total Lower 48 working gas in underground storage stood at 2,370 Bcf as of Jan. 18, 305 Bcf (11.4%) below the five-year average but 33 Bcf (1.4%) higher than last year’s stocks, according to EIA.

“Though fleeting, 2019 inventories are now above 2018,” Tudor, Pickering, Holt & Co. (TPH) noted Friday. “Inventories remain at an 11.4% deficit to the five-year norm, but are also at a 1.4% premium to 2018 and the five-year minimum.

“Weather adjusted, the market is 1.0 Bcf/d oversupplied (versus 2 Bcf/d oversupplied three weeks ago),” analysts noted. “Leading edge flows suggest that U.S. dry natural gas production is down 1.2 Bcf/d following frigid weather and several infrastructure-related events in the Northeast. All-in, Northeast production is down 1 Bcf/d week/week.”

Although Northeast gas production is recovering “through alternative forms of egress, production likely remains depressed as the polar vortex could lead to freeze-offs in the Midwest and Rockies,” TPH analysts said. “Thus, to end January, cold weather likely leads to the inventory deficit deepening and the weather-adjusted balance moving to an undersupply (at least temporarily).”

The current polar vortex cold weather pattern puts deliverability issues “very much back in play,” Genscape Inc. analyst Eric Fell said during a discussion Thursday on energy-focused chat platform Enelyst.

“Given the current weather forecast that is calling for a major cold shot between now and the end of January, it seems likely that we will see some short-term deliverability issues (physical cash market fireworks), given very high demand, storage balances that are well below normal and significant production freeze-offs,” Fell said.

Genscape production estimates already are dropping, with cold weather and operational issues both playing a part, according to the analyst.

“We’re seeing quite a few outages over the last several weeks, with freeze-offs being some of it and field outages being part of it as well,” Fell said. “In the Northeast, we currently see about 2.9 Bcf/d offline (1.4 Bcf/d due to the Tetco explosion). Most of the outages we’ve seen do not have a timeframe associated with them and could be more prolonged due to wintry conditions.”

March crude oil was trading 5 cents higher at $53.18/bbl shortly before 9 a.m. ET, while February RBOB gasoline was close to even at $1.3877/gal.