With traders not interested in making waves ahead of fresh inventory news Thursday, natural gas futures action was fairly quiet on Wednesday as the February contract traveled a slim range of just more than a dime before closing the regular session at $4.531, up a nickel from Tuesday's finish.

The 5-cent gain might have been a sympathy nod to the East Coast, which saw freezing temperatures and snow storms spanning from the Deep South up into the Northeast. According to forecasters, the chill isn't expected to leave anytime soon.

"The natural gas market is seeing some two-way action at the higher levels achieved [Tuesday] and overnight, with some ongoing skepticism over whether the current cycle of cold temperatures -- now seen extending into the fourth week of January -- represents a bullish development, or just the latest selling opportunity," said Tim Evans, an analyst with Citi Futures Perspective in New York. "We continue to see room for prices to move up to the $5 mark or slightly beyond that benchmark as the cold erases the 190 Bcf year-on-five-year storage surplus from Dec. 31 over the storage reports to come."

Taking a peek at Thursday's natural gas storage report, which is scheduled to be released at its normal 10:30 a.m. EST time, industry withdrawal estimates range from the mid-130s Bcf to nearly 150 Bcf.

Evans said he is expecting a 136 Bcf withdrawal, while Bentek Energy is projecting a 148 Bcf withdrawal, which would bring the inventory level to 2,949 Bcf. The research firm expects a 90 Bcf draw in the East Region, a 40 Bcf draw in the West Region and a 18 Bcf draw in the Producing Region.

"West withdrawals were more than twice as high [than the previous week] due to cold temperatures in the region," Bentek said. "SoCal reported the largest draw since January 2008."

The company added that many storage facilities in the Producing Region reported injections last week, particularly salt dome fields in response to lower demand in the region, while strong draws continued last week in the East Region, which were supported by large draws from Midwest facilities such as those on ANR and NGPL.

The storage number revealed Thursday will be compared to last year's whopping date-adjusted 251 Bcf storage draw for the week and the five-year average pull of 108 Bcf.

Some analysts see a combination of another round of Yukon-like cold pounding the East and Midwest combined with tempered drilling as auguring higher prices. "Some forecasts, cited by Dow Jones, predicted an arctic air mass caught in a static holding pattern over the Midwest and Great Plains around Jan. 22nd," said Peter Beutel, president of Cameron Hanover. Beutel cited forecasts that are calling for temperature readings that "could be as many as 20 degrees below normal...This will give us large withdrawals from storage and boost prices."

The supply dynamic also appears constructive. Beutel noted suggestions Tuesday that a decline in the number of drilling rigs would have to reach as many as 150 before supply and demand would be balanced, but "we feel that this estimate is more Draconian than needed. If temperatures remain bitterly cold, we will see some huge storage withdrawals that will push quotes higher."

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