With overnight forecasts shedding a small amount of heating demand from the outlook, and with traders preparing to digest updated government inventory data, natural gas futures eased lower in early trading Thursday. The May Nymex contract was down 2.1 cents to $2.597/MMBtu at around 8:45 a.m. ET.

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For this week’s U.S. Energy Information Administration (EIA) storage report, analysts are generally expecting a build in the mid-60s Bcf.

A Bloomberg survey found injection estimates ranged from 62 Bcf to 79 Bcf, with a median of 66 Bcf. The median of a Reuters poll landed at a build of 66 Bcf; injection estimates spanned 50 Bcf to 79 Bcf. NGI forecasted an injection of 67 Bcf for the period, which covers the week ended April 9.

An injection in line with consensus predictions would roughly match the 68 Bcf build EIA recorded in the year-ago period but would be bearish versus the five-year average injection of 26 Bcf.

“It was warmer than normal over most of the U.S. besides the Southeast, especially so across the Midwest,” NatGasWeather said of the upcoming EIA report period. “Our algorithm suggests a build of 69 Bcf to the conservative side and 72-73 Bcf if Good Friday/Easter led to a little lighter demand than expected. Either way, we expect a bearish outcome versus survey averages.”

The May contract managed to briefly test resistance as high as $2.666 in Wednesday’s session, analysts at EBW Analytics Group noted. However, the contract “then gave back all of its gains as traders took profits ahead of this morning’s storage report.”

While cash prices strengthened in Wednesday’s trading, softer weather-related demand expected next week could make further gains difficult to come by, according to the firm.

“For the May contract to reach the next major resistance level at $2.69, a further catalyst may be required,” the EBW analysts said. “The new storage report is unlikely to provide this catalyst. Major surveys are clustered in a tight range, predicting a build of 65-68 Bcf. 

“While a few forecasters are predicting a slightly smaller build, some well regarded analysts are calling for a build as high as 75-77 Bcf. If this verifies, natural gas futures are likely to lose ground,” they said.

As for the latest forecast outlook early Thursday, NatGasWeather said the European weather model dropped heating demand overnight, bringing it in better agreement with the American model, which was largely unchanged in its projections for the next 15 days.

“Both forecast a solidly bullish pattern” through April 24 “as a series of colder than normal weather systems sweep across the country, the coldest over the Midwest and Great Lakes,” the firm said. “However, the overnight data maintained national demand easing to light levels April 25-29 as much of the U.S. becomes comfortable.”

May crude oil futures were off 32 cents to $62.83/bbl at around 8:45 a.m. ET, while May RBOB gasoline was down fractionally to $2.0275/gal.