The prospect of a much-smaller-than-average inventory pull, coupled with a rash of mild temperatures over the next week and uncertainty surrounding the longer-range forecast, kept the pressure on natural gas futures Wednesday.

After trading as high as $2.185/MMBtu and as low as $2.115, the February Nymex contract settled at $2.141, off 2.1 cents. March settled 1.9 cents lower at $2.134.

In the spot market, discounts were the norm for much of the Lower 48 as forecasts showed warmer-than-normal temperatures dominating the eastern half of the country in the days ahead; NGI’s Spot Gas National Avg. skidded 5.5 cents to $2.035.

The spread between the March and April contracts — often seen as a gauge of the market’s expectations for how tight supplies will be by the end of the heating season — has narrowed considerably since the start of winter. On Wednesday, March settled at a slight discount to April, which finished at $2.135.

“That’s not good for the bulls,” Powerhouse President Elaine Levin told NGI. “It’s basically the market saying, ”Look, we don’t need to incentivize any producer, anybody, to give us more gas, because we don’t think we’re going to be tight.’”

Mild weather, at least in the short term, and a light withdrawal expected from this week’s Energy Information Administration (EIA) storage report, count among the bearish signals affecting the market currently.

“We’re almost down at $2. We’re getting to some bargain-basement prices,” Levin said. “Could we go under $2? Sure, but that tends to be a psychologically big number.”

If cold weather is going to show up and rally the market, it probably needs to happen soon, according to Levin.

“Granted, we could have a cold February or March, but still, we’re going into the heart of winter, and we don’t have enough demand or enough cold forecasted to make a difference” for prices at current supply levels, she said. “The cure for low prices should be low prices, but I think we could be staying low for a while.”

The latest European forecast data Wednesday added to heating demand expectations for the Jan. 16-22 period, according to NatGasWeather.

“The weather data is struggling to lock in exactly how much cold air will release out of Canada” during this time frame, the forecaster said. “The European model remained exceptionally warm versus normal over the southern and eastern United States much of the next seven days, but it does still show a decent amount of cold air arriving across the Midwest and Northeast” by late next week.

“If there were to be any further colder trends for this period, it would be viewed as increasingly bullish, making the overnight data important.”

As for Thursday’s EIA report, estimates Wednesday were pointing to a withdrawal well shy of historical norms for the week ended Jan. 3.

A Bloomberg survey showed a median pull of 52 Bcf, with estimates ranging from minus 46 Bcf to minus 73 Bcf. A Reuters survey landed on a 53 Bcf withdrawal, based on predictions from minus 41 Bcf to minus 73 Bcf. NGI’s model predicted a 51 Bcf withdrawal.

Last year, EIA reported a 91 Bcf withdrawal for the week ended Jan. 4, 2019. NGI calculations using EIA historical data show a five-year average withdrawal of 169 Bcf. That includes a record-setting 359 Bcf pull recorded for the week ended Jan. 5, 2018. As of Wednesday, EIA had not published its calculations showing historical comparisons for storage weeks in 2020.

Energy Aspects issued a preliminary estimate for a 45 Bcf withdrawal for this week’s report. The size of the withdrawal will be limited by “a continuation of the holiday impact and even milder weather” during the period, according to the firm.

“Additionally, weakness in Mexican net trade, which has been strangled by infrastructure outages in addition to a seasonal decline over the holidays, is impacting cross-border readings,” Energy Aspects said.

Elsewhere on the exports front, liquefied natural gas (LNG) feed gas demand has been averaging 8.1 Bcf/d following progress on commissioning the second train at the Cameron LNG facility, according to Genscape Inc. calculations.

“Net pipeline deliveries to U.S. liquefaction facilities have hovered near 8.1 Bcf/d (8.6% of current U.S. production volumes) since the start of the new year,” Genscape analyst Allison Hurley said.

A little more than a week after Sempra Energy’s Dec. 23 announcement that it began producing the first LNG at Cameron Train 2, on Dec. 31 Genscape recorded a new peak single-day delivery to the facility at slightly under 1.2 Bcf/d, the analyst said.

“This maximum daily delivery to the facility was repeated on consecutive days that week, on Jan. 3 and 4,” Hurley said.

Spot prices Wednesday sank along the East Coast, where above-normal temperatures were expected heading into the weekend. Tenn Zone 6 200L tumbled 42.5 cents to $2.840, while farther south Transco Zone 5 dropped 15.0 cents to $2.135.

The National Weather Service (NWS) on Wednesday was monitoring what was expected to be a slow-advancing cold front stretching from West Texas to the Great Lakes. The forecaster predicted a “significant warming trend” through the end of the week from the Southern Plains to the East Coast.

“Return flow on the western side of a strong surface ridge in the western Atlantic will advect moisture and warmer temperatures northward from Texas and the Gulf Coast to the Great Lakes just ahead of the cold front,” the forecaster said.

“Anomalous warmth will continue on Friday from Texas to the Great Lakes, with high temperatures running roughly 15-25 degrees above average. High temperature departures of 10-15 degrees above average will affect the East Coast.”

Midwest hubs eased lower Wednesday. Chicago Citygate gave up 4.0 cents to $1.970. Down in Texas, Houston Ship Channel dropped 6.0 cents to $1.935.

Meanwhile, numerous Rockies and California hubs continued to climb as the NWS was calling for a storm system to spread colder temperatures over the Western United States. The forecaster predicted a “quick moving round of locally heavy mountain snow for the Washington and Oregon Cascades, with locally heavy rain for the Southern Oregon to Northern California coast” Wednesday night.

Northwest Sumas rallied 67.0 cents to $3.440, while Malin gained 7.5 cents to $2.760.