In physical trading Thursday for Friday delivery, natural gas market points in the crosshairs of a broad storm system expected to rake the Rockies and move eastward proved resilient as other points weakened.

Eastern and Midwest points proved weak, with the East dropping close to 20 cents and the Midwest retreating about a dime. The NGI National Spot Gas Average skidded 11 cents to $1.78.

Futures looked as though they were headed for a gain following an Energy Information Administration storage report of a 76 Bcf withdrawal, about 12 Bcf greater than what the market was expecting. January futures had a mind of their own, giving up 4.7 cents to $2.015 after trading as high as $2.099. February lost 4.2 cents to $2.075. January crude oil fell 40 cents to $36.76/bbl.

With January futures knocking on the door of $2, traders are studying their data to see if $2 or near $2 suggests that a market bottom might be near. Just prior to its expiration in late October, the November contract plunged to $1.948. Traders have to go back to the spring of 2012 to find the next occurrence of sub-$2 futures.

Tom Saal, vice president at FC Stone Latin America LLC ,in his work with Market Profile (MP) sees “the next MP support is the bottom of a value area at $1.949 reached in calendar April 2002.” Saal admits that the lack of trading below $2 hampers useful analysis, but “a $1 handle is going to bring out a lot of buyers.”

“A warm November makes the whole withdrawal season terrible, but I think we saw two winters ago that if it does get cold, we can burn a lot of gas.

“Demand is up because population is greater; we have bigger houses, and in the Southeast we have more electric power heat generated by gas. When gas is used for heating almost all the gas is used for heat, but with gas-generated electric heat it is inefficient for it takes more gas to generate the heat.”

Going into the day’s market storage report, traders were seeing a bit more uncertainty surrounding the figures. “The market this week is once again all over the lot; our Early View Average [Friday] was -59 Bcf, and the range was a whopping -45 to -91 Bcf wide,” said John Sodergreen, editor of Energy Metro Desk. “This week, it’s tightened up to 20 Bcf wide: -53 to -73 Bcf. Bentek reports this week that it sees both high- and low-side risk inside the various storage zones. The Big B says its flow model came in at -66 and its S/D Model was lower at -60.”

Last year, 47 Bcf was withdrawn and the five-year average comes in at a 65 Bcf pull. The Energy Metro Desk Survey showed a 62 Bcf average, and a Reuters survey of 26 traders and analysts showed an average 64 Bcf withdrawal with a range of -48 Bcf to -75 Bcf. PIRA Energy expected a decline of 62 Bcf, and industry consultant Genscape calculated a 69 Bcf pull.

Some traders were caught a little flat-footed by the data. “We were looking for a 64 Bcf number, so 76 Bcf is significant,” said a New York floor trader. “I think this was a little bit of a surprise to most. I don’t think that was in the market.” He added that the number did seem a little strange given the mild weather and an average five-year withdrawal of 65 Bcf.

Analysts see missed supply-side assumptions. “The 76 Bcf in net withdrawals was a clear bullish miss versus expectations,” said Tim Evans of Citi Futures Perspective. “With the draw more than implied by the temperature data for last week we suspect a supply-side shift, either from U.S. producers pulling back on production or possibly a drop in imports from Canada in response to low prices.”

Using the new five-region format inventories now stand at 3,880 Bcf and are 514 Bcf greater than last year and 236 Bcf more than the five-year average. In the East Region 9 Bcf were pulled, and the Midwest Region saw inventories fall by 26 Bcf. Stocks in the Mountain Region were lower by 8 Bcf, and the Pacific Region was down 14 Bcf. The South Central Region, closely similar to the former Producing Region, shed 19 Bcf.

In physical market trading it depended somewhat on what side of a massive storm system you were on. Rockies prices held firm as temperatures were forecast to plunge by the weekend, but points to the east were expected to bask in continued warmth. AccuWeather.com forecast that Denver’s high Thursday of 64 would sink to 54 Friday before spiraling down to 31 on Saturday, a full 16 degrees below seasonal norms. Salt Lake City’s 59 high Thursday was seen dropping to 43 Friday and 40 by Sunday, 2 degrees above normal.

Gas at the Cheyenne Hub was flat at $1.87, and packages on Kern River added 3 cents to $1.99. At Opal next-day deliveries rose 3 cents to $1.99 as well, and gas on El Paso Permian shed 4 cents to $1.92.

To the east, temperatures were forecast to stay mild into the weekend, and next-day gas slumped. AccuWeather.com predicted Chicago’s 58-degree high on Thursday would slide to 55 by Friday before reaching a balmy 60 on Saturday, 23 degrees above normal. Milwaukee’s 57 high on Thursday was predicted to drop to 49 Friday before rebounding to 52 on Saturday, 18 degrees above normal.

Midwest and Great Lakes prices fell. Deliveries on Alliance shed 9 cents to $1.91 and gas at the Chicago Citygate dropped 8 cents to $1.96. Deliveries to Joliet changed hands down 9 cents to $1.91, and gas on Consumers and Michigan Consolidated fell 9 cents to $1.92 and $1.93, respectively.

Overnight weather models backed off somewhat from the extreme warmth forecast through the weekend, but longer-term forecasts still show the East and Midwest above normal. Commodity Weather Group in its Thursday morning report said, “[T]he models continue to bounce around a bit more in the 11-15 day currently, [but] they at least all agree that the pattern downshifts cooler after the super-warm one- to five-day situation that features coast-to-coast warm weather and super-above-normal temperatures at times for the Midwest, East and South. The six-10 day still cools from the West to the Midcontinent with the Southwest and California seeing some additional cooler to colder changes today, but getting that cooling to the East continues to be problematic.”

Market technicians are looking for a classic double-bottom formation to stem the price trend lower. “We have spent the past several days focusing our attention on the January contract. And rightly so. But with key support for the spot contract now just below we must shift our attention back to flat price,” said Brian LaRose, a market analyst with United ICAP.

“To have a shot at a longer period of consolidation, we need to see a double bottom into the $1.948 vicinity. Failure to double bottom will tell us that we have a five-wave decline off the $2.460 high [and lower prices still] on our hands.”