With overnight guidance shifting back warmer and the market awaiting potentially supportive government storage data this week, natural gas futures were trading close to even early Wednesday. The April Nymex futures contract was trading 0.7 cents lower at $2.777/MMBtu shortly after 8:30 a.m. ET.

Following a colder turn in the weather models Tuesday afternoon, guidance shifted warmer overnight for both the American and European datasets, according to Bespoke Weather Services.

“In the near term, the theme remains variability, with a warmer than normal bias to the pattern taking hold as we move into the final third of the month...There will likely continue to be enough storminess in the pattern to keep some variability in play late month, but at that point we believe that the warmer days will outnumber the colder ones both in terms of frequency and intensity,” Bespoke said.

The latest warmer trends effectively canceled out colder trends from Tuesday’s guidance, leaving the market to continue weighing a supportive storage picture against looser balances and “relatively weak weather demand,” according to the forecaster.

Estimates this week suggest the Energy Information Administration (EIA) could report a withdrawal greater than 200 Bcf Thursday, reflecting the intense cold that swept across the Lower 48 last week. Intercontinental Exchange EIA financial weekly index futures settled Tuesday at a withdrawal of 205 Bcf.

EBW Analytics Group CEO Andy Weissman noted the range-bound price action for the April contract Tuesday, with the front month testing support as low as $2.752 and resistance at $2.798 before finishing near the midpoint of that range.

After prices declined earlier this week, “this range-bound trading is not surprising,” Weissman said. “With a huge withdrawal expected Thursday, traders most likely would prefer to wait until after the storage report is released before expanding short positions. Further, weather over the next 10 days is expected to be cold enough to keep cash prices near current levels.

“Starting in Week 3, however, our forecast calls for much milder-than-normal weather for three straight weeks...As this below-normal space heating demand grows nearer, Nymex natural gas futures are likely to fall further.”

Meanwhile, reported inventory for Transcontinental Gas Pipe Line (Transco) is on track to end the heating season at its lowest level since 2014, according to Genscape Inc.

“Storage levels at the Washington Storage Field in St. Landry Parish, LA, are currently at 28.5 Bcf, 8.8 Bcf lower than any year since 2014 and just 2.4 Bcf higher than corresponding 2014 levels,” Genscape analyst Josh Garcia said. “This winter’s average withdrawal rate of 236 MMcf/d at Washington was the highest since winter 2013/14, though the withdrawal rate tapered off to 169 MMcf/d by the beginning of February.

“Considering this slower withdrawal rate, Washington storage levels are projected to land at 25.1 Bcf by the beginning of April, 11.1 Bcf lower than any year since 2014.”

Reported inventories at the smaller Eminence Storage Field in Mississippi are currently roughly in line with 2014 levels, Garcia said, who noted that Transco has reported total storage is at 47.2% of capacity, a figure that includes unreported stockpiles outside of the Washington and Eminence facilities.

April crude oil futures were up 67 cents to $57.54/bbl shortly after 8:30 a.m. ET Wednesday, while April RBOB gasoline was trading about 1.2 cents higher at $1.8279/gal.