After a sharp sell-off over the holiday weekend, and with the weather outlook largely unchanged day/day, natural gas futures were trading close to even early Wednesday. The February Nymex contract was trading 1.4 cents higher at $1.909/MMBtu at around 8:40 a.m. ET.

Heading into Wednesday’s trading, the latest 15-day outlook came in “marginally warmer,” according to Bespoke Weather Services. The pattern still showed a likelihood for “abundant warmth in the northern half of the nation, with the South generally held closer to normal.”

The forecast as of Wednesday would make this month the third warmest January in Bespoke’s historical dataset, behind only 1990 and 2006.

“Models try to make the pattern a little more interesting around Feb. 5-6, suggesting that a colder trough enters the Midwest/East,” Bespoke said. “While we should step away from the El Nino-ish look some, thanks to falling global angular momentum, the high latitude configuration again does not look favorable for cold.” This raises the suspicion that “models are again more likely to be overdoing cold out in the longer range time frames.”

The lack of cold in the outlook has taken a major toll on demand expectations over the past week.

The warmer revisions since last Tuesday have removed close to 100 degree days and nearly 200 Bcf of natural gas demand from Genscape Inc.’s daily supply and demand estimates.

Tuesday’s settle for the February contract marked “the weakest a prompt month contract has settled since early 2016,” Genscape senior natural gas analyst Rick Margolin noted. “A $2-handle doesn’t appear in the forward curve until June 2020.”

Meanwhile, looking ahead to this week’s Energy Information Administration (EIA) storage report, Energy Aspects issued a preliminary estimate for a 97 Bcf withdrawal for the week ending Jan. 17.

The firm estimated a 0.2 Bcf/d week/week drop-off in liquefied natural gas (LNG) feed gas demand because of “dense fog” delaying loadings at all four Gulf Coast LNG terminals during the report period.

On the supply side, the firm estimated a 0.7 Bcf/d week/week drop in production.

“The declines stem from the Midcontinent, as well as less prominent Gulf Coast sub-basins,” Energy Aspects said.

March crude oil futures were trading 63 cents lower at $57.75/bbl at around 8:40 a.m. ET, while February RBOB gasoline was trading fractionally lower at $1.6282/gal.