As forecasts overnight continued to show a colder than normal pattern for early next month, March Nymex natural gas futures were trading slightly higher early Wednesday, up 2.2 cents to $2.684/MMBtu shortly before 9 a.m. ET.

NatGasWeather viewed the overnight weather models as slightly colder trending, adding a handful of heating degree days (HDD) to the outlook.

Compared to the Global Forecast System, “the European model had been milder...with the overall pattern in recent days but gained 4 HDDs overnight compared to Tuesday’s data,” the forecaster said. “All weather models continue to advertise a mild to warm pattern across the South and East late this week into early next week, then plenty cold enough Feb. 28-March 5.

“With prices a few cents higher Tuesday, the natural gas markets appear to be weighing the colder back end of the 15-day forecast a little more heavily than the front end, at least so far.”

The year-on-five-year average inventory deficit is likely to increase to above 400 Bcf with the next two Energy Information Administration (EIA) weekly storage reports, according to NatGasWeather. If the colder than normal pattern for late February into early March holds, that deficit could continue to increase.

“But will it be enough to rally prices further? Today’s trade should be interesting to see if bulls can gain additional momentum, or if bears sell the recent bounce.”

Bespoke Weather Services noted an uptick in demand expectations for the Week 2 outlook period overnight, with models showing a pattern that could see cold push in across the Midwest to drop temperatures below average. Balances and the current temperature outlook could put $2.75 in play through the end of the week, according to the forecaster.

“Eventually the pattern is at risk of breaking down into mid-March, where we see trends that are a bit less favorable in the Pacific even with El Nino forcing returning, but before any moderation we will have a solid period of colder weather overall,” Bespoke said. “...Balances are not as tight as last week but tomorrow’s EIA print should be supportive, and with very significant cold likely Week 2 that is enough to get the front of the strip rallying.”

EBW Analytics Group CEO Andy Weissman attributed the gains in Tuesday’s session partly to a near-term increase in demand at Henry Hub that helped drive higher cash prices, along with “forecasts suggesting another late winter snowstorm will hit portions of the eastern U.S.

“Notably, however, even at its intraday peak, the March contract stayed well below resistance at $2.68 and $2.685 -- indicating that the March contract will continue to struggle to move higher,” Weissman said. “It is possible that this slow move up will continue this morning. Starting tomorrow, however, temperatures in the Southeast extending up the Atlantic Coast will be warmer than normal for five straight days, halting the rise in the forward curve.”

March crude oil futures were trading 34 cents lower at $55.75/bbl shortly before 9 a.m. ET, while March RBOB gasoline was off fractionally at $1.5630/gal.