On the eve of what some observers predict could be one of the largest reported storage withdrawals in history, the natural gas futures market appeared content to trade flat for the session Wednesday.

Neither a rally at the open nor a late morning sell-off could keep prices away from unchanged on the day as a majority of traders remained on the sidelines. By virtue of its 0.3-cent advance and $5.654 close, the March contract notched a third straight daily increase, a feat not achieved by a prompt gas contract since early December.

The doldrums in the gas pit had some gas traders looking to other hydrocarbons for direction. Crude offered its vote to the downside with a double heaping portion of bearish supply news Wednesday. The American Petroleum Institute reported crude oil inventories rose 6.3 million barrels last week and — after a short delay — the Department of Energy announced its own 7.9 million barrel estimated increase. March crude oil futures reacted accordingly, dropping an even $1.00 to close the session at $33.10.

Gas futures fell lower in sympathy, moving down to key support in the $5.55-60 area at noon EST. But unlike crude, natural gas managed an afternoon rally as traders considered what sort of potentially market-moving data will be released by the DOE in its weekly natural gas storage report Thursday.

Based on National Weather Service data suggesting a greater accumulation of actual heating degree days than originally forecast, the range of market expectations has gradually risen this week. Withdrawals estimates span the 200-230 Bcf range, with most recent reports favoring a number in the 215-225 area. A number of that magnitude would score the trifecta, surpassing the five-year average of 133 Bcf, the year-ago analog of 208 Bcf and last week’s reported 195 Bcf.

“Final temperatures averaged colder than expected and nationally, this was the fourth coldest week on record back to 1994,” noted Citigroup analyst Kyle Cooper. “From a temperature adjusted standpoint, a draw as large as 230 Bcf would still be considered only neutral,” he said noting that it would clearly not be bearish on an absolute basis.

“Be a bear, just not a grizzly bear,” chipped in Jay Levine of New Hampshire-based Advest Inc. “On the surface, a number below 200 Bcf [Thursday] will submerge natural gas,” he speculated.

While most remain negative, at least one chart watcher gives the market a better than average chance of pulling itself up off the recent series of lows. “Gas price action [Tuesday] gave several good indications that the decline from the January 9 high is complete,” wrote GSC Energy Analyst Craig Coberly in a note Wednesday. “Probabilities are high that this decline completed wave (b) of an Elliot Wave (a)-(b)-(c) pattern that started in late-November 2003.” Specifically, Coberly now calls for the market to stair-step higher with a remarkable $8.12 targeted as a probable objective.

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