The expiring February futures contract is expected to open 9 cents higher Wednesday morning at $5.12 as once again forecasters nudge short- and medium-term weather forecasts cooler for the bulk of the country. Overnight oil markets were mixed.

Weather forecasts overnight came in modestly cooler. WSI Corp. in its six- to 10-day outlook shows broad below to much below normal temperatures from the Pacific Northwest to Minnesota to Texas and to New England. Only the Southeast is forecast to have normal to above normal temperatures. "[Wednesday's] forecast is a bit cooler in the plains and East, especially in Texas. Forecast confidence remains about average, although questions remain on the tracks of two storm systems next week.

"The tendency in the overnight models was to suppress the SE ridge a bit, making for weaker/more shallow storms and colder temps for the East Coast than what was advertised in [Tuesday's] 12z runs."

Analysts see the higher prices paid in the cash market as boosting futures.

"The natural gas futures turned back to the upside on Tuesday, supported by a colder temperature outlook than a day ago as well as trade in the day-ahead physical market at premium levels," said Tim Evans of Citi Futures Perspective in closing comments to clients. "The Henry Hub delivery point for the Nymex futures, for example, was changing hands at $5.23; Chicago Citygate went for an average of $6.57, and Transco Zone 6 (NY) was $5.20/MMBtu.

"While there's clearly a difference between Jan. 29 and February average delivery, these higher cash values do exert an upward tug on nearby futures, particularly as they approach [Wednesday's] February expiration."

Those searching for a top in the market are waging a difficult battle, according to a leading technical analyst. "[There is] a good case for a complete advance off the $3.129 low. However, we are still missing the two most important ingredients in the recipe for peaking action, a bearish bias on the short-term technicals and a break below key support," said Brian LaRose, an analyst at United ICAP.

"Until and unless the short-term technicals can produce a sell signal and both $4.823 and $4.698 can be broken bears need to be very cautious," he said in closing comments to clients.

Tom Saal in his work with Market Profile is expecting the market (March contract) to test Tuesday's value area at $4.882 to $4.750. He says to "keep your eye on the $4.600 level in both the Feb'14 and Mar'14 contracts [and pointed out] continued buying strength shown in the back years.Cal'15, Cal'17 & Cal'19."

The early read on Thursday's storage report is for a draw well into the 200 Bcf area. Kyle Cooper of IAF Advisors forecasts a withdrawal of 236 Bcf, well ahead of last year's 191 Bcf and a five-year average of 162 Bcf.

In overnight Globex trading March crude oil fell 28 cents to $97.13/bbl and March RBOB gasoline rose a penny and a half to $2.6523/gal.