March natural gas prices were slightly higher early Wednesday as weather models began to come into agreement on the intensity of a cold weather system that will sweep into the country next week. The Nymex March gas futures contract was trading at $2.696, up 3.4 cents, at around 8:30 a.m. ET.

Weather data overnight Tuesday was mixed, with the Global Forecast System (GFS) model adding several heating degree days (HDD) and the European model losing a little demand. Still, the trend is colder overall compared to the rest of the data, according to NatGasWeather. Recent trends have been for a little colder weather system around Feb. 13-14, with a mild break across the South and East Feb. 16-18 that really stands out.

“The data still looks quite chilly across much of the United States Feb. 19-21, but with inconsistencies on how much cold air will arrive into the South and East. Overall, difficult to know if the markets see the data as a little colder overall with the GFS adding some demand compared to previous days,” the firm said.

The latest data is viewed as neutral to slightly bullish; it’s just the milder breaks between cold shots over the South and East “help lose the bullish luster.”

For its part, Bespoke Weather Services said the pattern for late Week 2 into Week 3 looks to shift finally more toward a standard positive Pacific North American pattern as the Madden Julian Oscillation propagates, with a cold shift eastward. “This has us still favor colder risks overall into Week 3, which can continue to support the gas market as gas-weighted degree days will struggle to sustain below average here.”

Still, although bullish mid-February forecasts are helping to avert a total collapse in Nymex futures, market momentum is decidedly bearish, according to EBW Analytics. Bulls have hopes pinned on ultracold weather materializing for mid- to late February, which may still materialize.

“Without a credible threat of a supply adequacy crisis by the end of the withdrawal season, however, the March contract has faltered -- and is likely to continue to struggle ahead,” EBW CEO Andy Weissman said.

To be sure, the market is looking ahead to what could be the largest storage withdrawal of the winter and could lead shorts to take profits in the near term.

The weekly Energy Information Administration (EIA) storage report scheduled Thursday may yield a Top 10 all-time withdrawal, and the next two storage weeks feature 25 gas-heating degree days and 46 Bcf of above-normal demand, with extreme cold in the Upper Midwest, EBW said.

“If cold anomalies can push farther southeast and reach major metropolitan areas, demand may climb rapidly.”

Even so, with general weakness in the cash market and no chance for a supply adequacy crisis, the fundamental reasons for a March premium to April become increasingly slim. “As long as the March contract remains at a premium, gas marketers have an incentive to increase near-term supply -- and send spot market prices even lower,” Weissman said.

Crude oil futures were trading more than a dime lower at $53.54/bbl, and RBOB gasoline futures were trading nearly a penny lower at about $1.42/gal.