Buoyed by a larger-than-expected 137 Bcf storage withdrawal figure, natural gas futures probed the upside Wednesday afternoon as traders continued to shy away from the short side of the market. After working its way lower throughout most of the morning, February turned higher just before noon EST when it became apparent that sellers would not be able to keep prices below the $2.30 level. The prompt month finished the session in an undeniably bullish manner, carving out a new two-week high and closing 10.3 cents stronger on the day at $2.394.

According to the American Gas Association, 44 Bcf and 7 Bcf were withdrawn from the Producing Region and the Consuming Region West, respectively, with the Consuming Region East accounting for the remaining 86 Bcf. In addition to falling at the top end of the 110-140 Bcf range of expectations, the 137 Bcf withdrawal easily surpassed the 103 Bcf draw from a year ago as well as the five-year average at 124 Bcf. Underground storage facilities in the U.S. are now 77% full at 2,529 Bcf, which is 1,070 Bcf more than at this time last year.

Looking ahead, the market will take its next price clue from updated long-lead weather forecasts set to be released today by the National Weather Service. The NWS gave the market a little bit of a bullish boost a month ago when it released December’s outlooks, which called for normal temperatures through March for the entire northeastern United States, extending west to include the Upper Midwest and Great Lakes regions.

In daily technicals, February has immediate resistance at Wednesday’s $2.40 high. Intermediate resistance, meanwhile, is seen at $2.47 ahead of the $2.510-545 chart gap created on the February daily chart by the gap lower open on Jan. 2. On the downside, prior lows at $2.30 and $2.26 form the first level of support, followed by more buying expected in the $2.14-20 area. A break of $2.14 could invoke sell stops that would drop the market down to $2.00 in a hurry, but few market watchers expect sub-$2.00 pricing on the market’s first attempt lower.

Tim Evans of IFR Pegasus still favors the upside and looks to ride a long position (from $2.28) to further gains. A $2.255 sell stop is placed below the market to protect him from a reversal.

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