While much of the Northeast was still digging out following last weekend’s Winter Storm Jonas, warmer temps on the horizon for much of the country tugged physical natural gas prices for Thursday delivery into the red. Over in the futures arena, February natural gas — on expiration day –made it six consecutive closes in the black to go off the board at $2.189, up nine-tenths of a penny from Tuesday’s finish.

The March contract, which now assumes prompt status, closed Wednesday’s regular session at $2.157, down one-tenth of a penny.

The February contract’s finish on a six-session bull run could very well have been aided by market anticipation of Thursday’s fresh natural gas storage data, which is expected to reveal the season’s first 200 Bcf-plus withdrawal.

Over in the cash market, most individual point losses were in the 1- to 5-cent range, as warm ups were expected in pockets across the country. NGI‘s National Spot Gas Average dropped 4 cents from Tuesday to $2.14.

In the West, SoCal Citygate and PG&E Citygate were neck and neck with 4-cent and 6-cent declines to $2.44 and $2.46, respectively, while in the Rockies, Kern River and White River Hub dropped 5 cents and 3 cents, respectively, to average $2.06 apiece.

The Northeast region saw some significant drops in price as thawing continued. Algonquin Citygate on Wednesday for Thursday delivery plummeted 65 cents to average $3.52, while Tennessee Zone 6 200 L sliced 40 cents from the previous day to average $3.50.Transco Zone 6-NY dropped 9 cents to $2.43.

As for fundamentals, Genscape Inc.’s Rick Margolin, senior analyst — natural gas, sees a number of factors lining up for natural gas price bears. In an analysis released Wednesday, Margolin said Lower 48 natural gas production levels are recovering and the eastern gas demand situation going forward is expected to wane. However, he noted that Winter Storm Jonas failed to crimp demand as had been expected.

“Lower 48 dry gas production has been slowly rebounding from mid-December, though [Wednesday’s] estimated flows have retrenched slightly,” Margolin wrote in Genscape’s Natural Gas Basis commentary. “Spring Rock’s Daily Pipe Flow estimate has [Tuesday’s] production just over 72.35 Bcf/d, its highest level in 46 days.” The estimate Wednesday “has fallen back, though, coming in 0.32 Bcf/d lower. Nearly every region is showing declines, though the largest (0.19 Bcf/d DOD) are in the East. Each sub-region there is showing declines. As with last week, there are disruptions to volumes hitting Tennessee from the Utica East Ohio Kensington Dehy plant, where [Wednesday] noms are down 80 MMcf/d DOD and are 110 MMcf/d below the 30-day average.”

He added that TETCO receipts from two separate Regency points were at zero for a second day in a row, down a total 170 MMcf/d from the 30-day average. Down south in the Gulf of Mexico, Destin volumes from Delta House were down nearly 90 MMcf/d DOD and 170 MMcf/d below the 30-day average.

Also on the bearish side of the ledger is that the outlook for demand in eastern markets is weakening as weather models continue trending warmer. Genscape’s population-weighted heating degree day forecasts for New England, Appalachia, Southeast/Mid-Atlantic (SEMA), and the Midwest are all calling for above-normal and progressively warming temperatures well into the first week of February.

“Our corresponding demand forecasts have demand in decline for the next several days. By Jan. 31, demand is expected to bottom out in all east regions: Midwest at 9.5 Bcf/d; New England at 2.78 Bcf/d; Appalachia at 13.56 Bcf/d; and SEMA at 12.97 Bcf/d,” according to Margolin. “As has been the case almost all winter: the only hints of action remain out West due to colder and volatile weather,” however, as Genscape noted Tuesday, “there are bearish factors arising in the renewables sectors that could scrub gas demand.”

If price bulls have any glimmer of hope, it can be taken from what Jonas did or did not do to the natural gas supply/demand picture. While the Northeast and Mid-Atlantic regions continue to dig out from Jonas, demand numbers are in for the storm, and they are not what many analysts had been expecting. It was expected that blizzard-like conditions and significant snow accumulation totals would team up to shut down businesses and schools, tamping down gas demand. However, Margolin said Genscape data saw gas consumption match or exceed historical demand per degree observations that were not accompanied by any closures.

“From Jan. 21-Jan. 23, average population weighted temperatures in the Appalachian and New England regions were 24.2 F and 25.3 F, respectively. During the same period, Appalachian demand averaged 17.23 Bcf/d while New England averaged 3.63 Bcf/d,” he said.

“Appalachia’s demand figure comes in 0.37 Bcf/d higher than last year’s average demand under similar temperature conditions. New England’s 3.63 Bcf/d average during the storm matches last year’s average demand exactly, under similar temperature conditions. Keeping these winter temperature environments constant, Appalachia demand is showing significant structural growth. In the past five years, year-over-year demand growth has averaged 0.57 Bcf/d. Demand in New England has stayed relatively flat under these conditions.”

Heading into Thursday morning’s Energy Information Administration natural gas storage report for the week ending Jan. 22, it appears most industry insiders are looking for a withdrawal north of 200 Bcf, which if realized, would be the largest draw of the season. A draw of that size would also be bullish when compared to historical figures for the week.

Citi Futures Perspective analyst Tim Evans is expecting a 211 Bcf withdrawal. He characterized the screen’s upside probing Wednesday to a slightly cooler temperature outlook, anticipation of a 200 Bcf-plus withdrawal and book squaring ahead of February’s expiration. However, he warns the upside could be limited. “Without some forecast for much colder-than-normal temperatures, it looks as though last week may have been the coldest of the year, roughly matching the normal seasonal pattern,” Evans said.

A Reuters survey of 23 industry traders and analysts produced a 180 Bcf to 245 Bcf withdrawal range and a consensus expectation that 207 Bcf was removed during the week. Last year saw a 111 Bcf draw for the week and the five-year average decline stands at 170 Bcf.

“Withdrawals have been ramping up significantly over the past several weeks so an expectation of 200-plus Bcf shouldn’t come as much of a surprise,” according to NGI Market Analyst Nate Harrison. “That’s not to say that expectations are always right. In fact, in the same week in 2015 the withdrawal made a rare appearance on the outside of the industry range, coming in 3 Bcf below the low end.”