Natural gas futures pared their recent losses in early trading Tuesday as the market continued to assess a mixed winter forecast for the opening third of December. As of around 8:55 a.m. ET the January contract was up 7.8 cents to $7.274/MMBtu.

NGI Morning Natural Gas Price & Markets Coverage

The December contract rolled off the board on a bearish note Monday, dropping 31.2 cents to settle at $6.712. January settled 13.4 cents lower Monday at $7.196.

Taking over as the prompt month, the January contract was modestly higher early Tuesday as traders assessed mixed trends from forecasts overnight.

The American weather model trended warmer overnight to bring it into better agreement with the European model, which held steady in terms of overall heating degree day projections, according to NatGasWeather.

Both models “continue to show swings in forecast demand every few days for the coming 15 days,” NatGasWeather said. The pattern in the latest model runs was “overall not as cold” as the data had previously advertised, “but still with bouts of stronger demand.”

However, stretches of warmer temperatures in between the stronger demand periods “makes the coming pattern not quite cold enough overall to intimidate,” the firm added.

The lack of sustained frigid temperatures in forecasts, coupled with record-level domestic production, could put downward pressure on prices, NatGasWeather said.

“If the weather data were a little colder” for the first third of December “it would take on a bullish lean. But without it, we view the pattern as closer to seasonal,” the firm said.

Meanwhile, from a technical standpoint, ICAP Technical Analysis told clients following Monday’s session that it would be watching to see if prices form a bottom.

“Have a test of the 22/50 day moving averages (January contract terms) and a potential hammer on the daily candlestick chart,” ICAP analyst Brian LaRose said. “So, on the lookout for any signs a bottom could be forming here. Should the bulls fail to find their footing still peg the ratio retracements associated with the $6.132 low as our candidates for support.”

Looking ahead to this week’s Energy Information Administration storage report, NGI is modeling an 89 Bcf withdrawal for the week ending Nov. 25. That would outpace both the 34 Bcf five-year average withdrawal and the 54 Bcf pull recorded for the year-earlier.

Three estimates submitted to Bloomberg as of early Tuesday ranged from withdrawals of 72 Bcf to 82 Bcf.