With no signs yet of an expected cold front on the East Coast and fairly bearish weekly storage predictions, February natural gas futures on Wednesday had no choice but to decline for a second straight regular session.

The prompt month plowed back below the psychological $6 mark in early trading Wednesday in search of support lines. February natural gas reached a low of $5.83 as of noon eastern time before settling at $5.943, down 15.2 cents.

“Whatever the prospects might be for an arctic blast to make a run on natural gas supplies, the fact of the matter is that it’s not here yet,” said Tim Evans of IFR Energy Services. “In fact, with Chicago’s [Tuesday] overnight low running some 20 degrees warmer than normal, the market seems to be losing faith in the more supportive weather scenario altogether.”

With February natural gas approaching the $5.71-5.77 lows from last week, Evans said a break of that floor might drive the market toward projected support at $5.10, or the 2003-2004 lows in the $4.39-4.52 range as longer-term targets.

On the upside, Evans said, “The market needs to rebound past at least the $6.148 session high in order to spark a fresh run to the upside, but the degree to which prices have already dropped confirms considerable opposition at Monday’s $6.55 high, which dented but did not break the failed spot support in that vicinity.”

Advest Inc.’s Jay Levine said he continues to view the low $5.80s down to the high $5.70s as the first good support area, with $5.60/5.55 as the next level. “A break of $5.50 — particularly on a close — and I’d then target $5.25,” he said. “My first resistance north of $6 doesn’t come into play until the mid/high $6.20s, [somewhere around] $6.26-6.29/6.30 then $6.55-6.60.”

Looking towards the Energy Information Administration’s (EIA) natural gas storage report for the week ended Jan. 6, the consensus estimate appears to be a draw in the 105 Bcf area. The report will be released Thursday morning at 10:30 a.m. (EST).

According to EIA, the year-ago report for the week ending Jan. 2. (53 weeks ago) featured a scant 52 Bcf withdrawal. Market watchers last year attributed the small draw to the widespread shutdown of industrial facilities (see Daily GPI, Jan. 9, 2004). They also noted that a large percentage of commercial buildings opted to close for one or both of the two abbreviated holiday workweeks in 2004.

However, that number may be a bit misleading. Over the course of the entire month last January, the market drew an average of 158 Bcf per week as chilly temperatures forced utilities to pull gas for heating demand.

“I’m apparently high-as-a-kite with a 166 Bcf [projection],” Levine said. “I’ve even heard estimates as low as 60 Bcf (the market is acting like it’ll be 60 Bcf) and needless to say any release towards either extreme will elicit…an extreme reaction.”

Also taking the high side, Evans said he is looking for a 140-150 Bcf pull. Putting in his two cents on where he believes storage might finish the withdrawal season, Evans predicted inventory will settle at 1,120 Bcf, about 100 Bcf above the five-year average.

Sticking closer to the consensus average, Citigroup’s Kyle Cooper said he is looking for a draw between 99 and 89 Bcf. “A withdrawal in this range would again be considered bullish from a temperature-adjusted basis,” he said.

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