Natural gas futures were trading slightly lower early Thursday as the market awaited updated government inventory data that was expected to show a lighter-than-average weekly withdrawal from Lower 48 storage. The January Nymex contract was down 3.7 cents to $3.778/MMBtu at around 8:50 a.m. ET.

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For the latest Energy Information Administration (EIA) storage report, scheduled for 10:30 a.m. ET, a Reuters survey showed withdrawal estimates ranging from 36 Bcf to 64 Bcf, with a median pull of 53 Bcf. A Bloomberg survey of seven analysts produced a tighter range of withdrawal projections, with a median draw of 60 Bcf. NGI also modeled a 60 Bcf decrease in inventories for the upcoming report, which covers net changes during the week ended Dec. 3.

In the year-earlier period, EIA recorded a 78 Bcf withdrawal from storage, while the five-year average draw is 55 Bcf.

“It was cooler than normal over the eastern U.S. but warmer than normal over the western, central and southern U.S.,” NatGasWeather said of conditions during the latest EIA report week. “We expect a draw of 50-51 Bcf, although potentially lighter due to tricky accounting associated with the Thanksgiving/Black Friday holiday where schools and offices were closed.”

EBW Analytics Group pegged consensus expectations for the upcoming report at around minus 53-56 Bcf.

“While a surprise in either direction may develop into a market-moving catalyst, a renewed test of support appears likely before a notable rebound higher develops,” EBW senior analyst Eli Rubin said.

Natural gas prices have shown signs of trying to establish a bottom following the steep post-Thanksgiving sell-off, according to Rubin.

“Very weak immediate-term spot demand,” including below-normal gas-weighted heating degree days Friday and Saturday, “is making it difficult for natural gas to turn higher,” Rubin said. “Weak physical demand will extend into early next week.”

Still, “by mid-to-late next week, a cooler late-December forecast rolling forward into the 11-15 day window is likely to help the market look beyond a resolutely bearish near-term heating demand outlook, laying the groundwork for a more robust relief rally to occur,” the analyst added.

NatGasWeather said it viewed gains over the previous two sessions as a result of “a technically oversold bounce” following the heavy losses going back to the prior week. Strong global prices have also likely played a role, according to the firm.

As for overnight changes to the weather outlook, NatGasWeather pointed to “minor” heating degree days losses from the American and European models.

“There will continue to be chilly weather systems into the West the next 15 days that at times will eject across the Midwest for locally stronger demand,” the firm said. “But with much warmer than normal conditions over the important southern and eastern U.S., national demand just won’t be as strong as needed. We continue to expect better opportunities for colder systems into the northern and eastern U.S. during the last week of December and first week of January.”

January crude oil futures were off $1.00 to $71.36/bbl at around 8:50 a.m. ET.