With forecasts shedding weather-driven demand overnight, the February natural gas futures contract plunged below $3 in early trading Thursday as the market prepared to digest the latest round of government inventory data.

The February Nymex contract was down 24.9 cents to $2.818/MMBtu at around 8:45 a.m. ET, while March was trading 17.2 cents lower at $2.743.

Surveys show the market expecting another lighter-than-average January storage withdrawal from the Energy Information Administration’s (EIA) 10:30 a.m. ET natural gas storage report, which covers inventory changes during the period ended Jan. 20.

Bloomberg’s poll as of Wednesday found estimates spanning decreases of 76 Bcf to 91 Bcf, with a median of 82 Bcf. Responses to Reuters’ survey ranged from withdrawals of 76 Bcf to 94 Bcf, with a median decrease of 83 Bcf. The Wall Street Journal’s survey produced draw estimates from 76 Bcf to 87 Bcf and landed at an average of 82 Bcf. NGI predicted a pull of 81 Bcf.

For comparison, EIA recorded a 217 Bcf withdrawal for the year-earlier period, while the five-year average inventory decline is 185 Bcf.

“Even a ‘bullish’ surprise…would still be nearly 15 Bcf/d looser than the five-year norms,” EBW Analytics Group analyst Eli Rubin said of the latest EIA report.

January weather has disappointed from the bulls’ perspective, and recent storage data reflect anemic demand compared to historical norms.

In last week’s report, EIA printed a decrease of 82 Bcf for the week ended Jan. 13, bearish versus the five-year average draw of 156 Bcf and the year-earlier pull of 203 Bcf. It lowered inventories to 2,820 Bcf but left stocks above the five-year average of 2,786 Bcf. Before that, EIA reported a rare January injection of 11 Bcf for the period ended Jan. 6.

Looking at the latest forecast data, both the American and European weather models shed heating degree days (HDD) from the outlook overnight, according to NatGasWeather. Demand losses included a “massive” 23 HDD decline from the American dataset, the firm said.

“A strong winter storm will exit the East today, while a colder system upstream will track across the Midwest Friday through Sunday,” NatGasWeather said. This would open the door for “reinforcing frigid shots to advance aggressively into the northern and central U.S. next week…However, the overnight data wasn’t as aggressive advancing cold air south and eastward, and didn’t hold it as long,” particularly the American model.

The expiration of the February contract could make for “bumpy” price action the next two sessions, the firm said.

“There hasn’t been much to the bullish side recently besides the colder pattern” for late January into early February, NatGasWeather said. “And after the overnight data trended several HDD warmer for it, and for several days after, the coming pattern lost some of its bullish luster.”