With the less-intense heating demand projected after this week failing to impress the market despite colder overnight trends, natural gas futures were trading slightly lower early Wednesday. The December Nymex contract was off 2.2 cents to $2.599/MMBtu shortly after 8:30 a.m. ET.

The major weather models moved in the colder direction again overnight, resulting in a “rather impressive” accumulation of gas-weighted degree days (GWDD) since the weekend, according to Bespoke Weather Services. As of early Wednesday, the European model had added close to 9 GWDDs over the previous 48 hours, while the American model had added nearly 25.

“Despite such a change, however, the pattern still is not far from normal beyond this week, as we do not currently see anything close to a repeat of this week’s cold in the forecasts,” Bespoke said. “We still feel variability will be the rule in the second half of the month, but we also still see risks to the warmer side once into December, provided that blocking is not strong enough to overwhelm the tropical forcing signals we are monitoring.

“...The market is clearly telling us that we need sustained strong cold to move back higher,” and that level of heating demand is absent from the pattern beyond the current week, according to the forecaster.

The market’s reaction to this week’s intense cold shows that the bears are “in charge” at the moment, according to EBW Analytics Group analysts.

“The natural gas market shrugged off bitterly cold weather, a bullish shift in the 15-day forecast and an uptick in prices at Henry Hub” in Tuesday’s trading, with the front month settling at a small loss on the day, the EBW analysts said.

Looking at the 11-15 day forecast period, as of early Wednesday there remained a divergence between the major models, with the European advertising a warmer than normal pattern and the American model coming in “significantly colder,” according to EBW.

“Until this conflict is resolved, natural gas is likely to remain range-bound,” the analysts said.

In the latest supply picture, Genscape Inc.’s production estimate early Wednesday showed freeze-offs in the Lower 48 taking about 1.3 Bcf/d of output offline.

That’s compared to about 1.7 Bcf/d of impacts in Tuesday’s estimate, “so it appears the worst is over as weather migrates eastward out of producing areas,” Genscape senior natural gas analyst Rick Margolin said. “Since freeze-offs started hitting in late October, there has been a cumulative 7.9 Bcf of production impacted.

“...Due to the early start (the earliest we had previously seen freeze-offs was Nov. 11 in 2014) and the progressively greater impact freeze-offs have from the growth of liquids-rich plays, this is by far the highest accumulation of production impacted” at this point in the season compared to previous winters.

A little after 8:30 a.m. ET, December crude oil futures were off 28 cents to $56.52/bbl, while December RBOB gasoline was off fractionally to $1.6098/gal.