Natural gas futures gained ground ahead of weekly government storage figures Wednesday, but cash market participants saw prices ease by mostly less than a dime, ecept for a few Northeast points which dropped by less than 15 cents. At the close of futures trading March rose 1.7 cents to $2.643 and April added 0.2 cent to $2.775. April crude oil gained 3 cents to $106.28/bbl.

A Florida gas buyer said they were not in the market Wednesday with no appreciable heating or AC load. “It’s really nice outside, but I think the weather will start getting warm by mid-March. I don’t expect it to be nice much longer; the winter was nothing, but I think we’ll have a hot summer.”

He suggested that even if it were a warm summer, “prices won’t move up all that much unless there is a big change to supply.”

Quotes on Florida Gas Transmission Zone 3 were unchanged, but in the Northeast steeper declines ruled the day. Algonquin Citygate along with a couple of Iroquois points and Tennessee Zone 6 200 L fell by more than a dime.

Forecaster predicted the high in Boston Thursday would reach 54 degrees, 14 degrees ahead of its normal high this time of year. The National Weather Service in southeast Massachusetts said mild and drier weather would prevail through the end of this week. High pressure was to build across the region Wednesday afternoon.

A gas trader in Southern California said lower power loads were contributing to overall lower prices and were masking the effect of the San Onofre nuclear plant outages. “We’re seeing a 6-7% decrease in load year-on-year and Socal [gas] hasn’t moved too much. It’s about 10 cents lower than the first of the month.” The trader added that the decline in power load could be offsetting otherwise higher demand from the San Onofre outage thus leading to a modest decrease in prices.

A Bentek Energy analyst confirmed the lower loads in Southern California. He said on peak and off-peak power requirements for Southern California reported by the California Independent System Operator year-to-date averaged 12,600 MW and for 2011 the comparable figure was 13,456 MW. It was his assertion that the lower 2012 number was “accentuated by the mild weather in Southern California.”

Gas deliveries to Malin and SoCal Citygate came off by a penny or two, and PG&E Citygate were flat.

Prices at Gulf points fell. Henry was seen a couple of pennies lower, as well as Tetco E LA, Trunkline E LA, and ANR SE.

Futures traders noted that the March contract languished for much of the session in negative territory, but “toward the end of the day we rallied up to [about] $2.65 going out. I think it’s just shorts leaning on shorts ahead of the number,” said a New York floor trader. “I think $2.50 is the next target. I look for the [storage] number to come out and we’ll settle down at $2.50 for the next couple of days.”

For the first time in a few weeks, estimates of the weekly Energy Information Administration storage figure surpass last year and the five-year average withdrawal. Last year 102 Bcf were withdrawn and the five-year pace stands at 145 Bcf. A Reuters survey of 24 analysts and market pundits revealed an average 158 Bcf decline with a range of 113 Bcf to 176 Bcf, and Citi Futures Perspective expects a 157 Bcf pull. IAF Advisors of Houston calculates a 175 Bcf draw and Bentek Energy predicts a 174 Bcf withdrawal.

Analysts saw Tuesday’s decline consistent with the overall burdensome level of inventories and weather reports calling for moderate conditions. “The ‘spark’ that brought in fresh selling [Tuesday] came from weather reports calling for warmer-than-normal temperatures through the end of February,” said Peter Beutel, president of energy consulting firm Cameron Hanover. “It was not the first weather forecast calling for a warmer-than-average February or end of this month. It was the most recent weather report calling for it, though.”

At present, lower-rig-count, production-cutting bulls are locked in hand-to-hand combat with moderate-weather, oversupply bears and it appears that as long as lows in the low $2.20s hold, neither side has enough advantage to move prices much in either direction.

Late Tuesday the bulls added some more ammunition to their arsenal in the form of additional production cuts announced by Chesapeake Energy Corp. The company ratcheted up its production cuts to 1 Bcf/d from its earlier reductions of 0.5 Bcf/d. The company said it was done “as an effort to help bring U.S. natural gas supply and demand into better balance.” The curtailments at 1 Bcf/d now amount to about 15% of U.S. Lower 48 gas production, primarily in the Haynesville and Barnett shale plays (see related story). The company said that wherever possible it is deferring completions of dry gas wells that have been drilled, but not yet completed, and is also deferring pipeline connections of dry gas wells that have already been completed.

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