After a choppy day of trading, natural gas bulls failed to gain momentum even as weather models stabilized and showed cold weather returning to the country for the last few days of the month. The Nymex March gas futures contract settled Thursday at $2.573, down two-tenths of a cent. April slipped 1.1 cents to $2.61.

Spot gas prices, after a few days of being mostly in the red, were more mixed Thursday as a cold blast was set to arrive in the middle of the country on Friday and then spread eastward through the weekend. Still, steep declines in the West sent the NGI Spot Gas National Avg. down 17.5 cents to $3.060.

On the futures front, the Nymex March contract had shown signs of life early in Thursday’s session after weather models stabilized after being rather volatile the last few days. The prompt month was up 1-2 cents ahead of the Energy Information Administration’s (EIA) weekly storage report.

When the EIA announced a smaller-than-expected 78 Bcf withdrawal, the market appeared unfazed as prices shifted very little after the report’s release. That’s likely because although the majority of estimates had called for a more significant drawdown, there were others who pegged an even smaller draw.

A Bloomberg survey of 11 market participants had a draw range of 77-106 Bcf, with a median draw of 82 Bcf. A Reuters survey of 21 analysts had the same range, with a median of 84 Bcf. NGI estimated a 73 Bcf withdrawal.

Inventories as of Feb. 8 stood at 1,882 Bcf, 30 Bcf below last year and 333 Bcf below the five-year average, according to EIA.

Broken down by region, the Midwest reported a 30 Bcf withdrawal, the East pulled 24 Bcf and the Pacific withdrew 17 Bcf. The South Central region reported a 4 Bcf net injection, with a 7 Bcf injection into salt facilities and a 4 Bcf withdrawal from non-salt.

After a couple weeks of volatile EIA data, the print fit Bespoke Weather Services’ expectations better as its number (-82 Bcf) was slightly below the analyst consensus as well. “This number is still quite loose and in itself will not inspire a rally. However, much of the looseness last week appears due to liquefied natural gas exports that were significantly limited due to fog at key Southeast ports,” Bespoke chief meteorologist Jacob Meisel said.

Balances this week have tightened up significantly, and the firm is looking for tighter EIA prints the next few weeks. The result is a risk that the market has a “sell the rumor, buy the news” event whereby even though the number itself was not bullish, there were plenty of bearish risks and the market knew it would be bearish, Bespoke said. This sets up the market “for a bounce in anticipation of tighter numbers and more supportive balances.”

Indeed, by 11 a.m. ET, the prompt month had climbed as high as $2.613, up 3.8 cents. From there, though, natural gas bulls couldn’t sustain momentum and the March contract softened throughout the rest of the session.

The midday weather data, meanwhile, continued to see strong demand this weekend through the middle of next week, but held milder trends for late next week through Feb. 26. The primary cause is a stronger and milder ridge over the East, according to NatGasWeather. Much of the data favors cold returning across the East Feb. 27-March 1, and conditions remaining chilly over much of the rest of the country for a swing back to strong national demand.

“The Global Forecast System data was a little colder this run to add a few heating degree days, but likely isn’t going to be enough to intimidate unless it trends further colder, but would require the European model to trend colder as well. March futures haven’t been able to take out recent support of $2.55, so that’s the level bulls hope to hold and bears want to take out,” NatGasWeather said.

Indeed, technical support has been coming into play recently as prices have fallen close to the $2.50 level of support that has not been broken since 2016. And with forecasts still calling for colder-than-normal weather during Weeks 2 and 3, the March contract is not expected to immediately tank, according to EBW Analytics.

Furthermore, DTN’s Week 4 preview features an expansion of Week 3’s pattern, with colder-than-normal weather expected across the Lower 48. Current forecasts suggest heating demand may decline 13 gas-heating degree days from Week 3 to Week 4 as the intensity of cold declines seasonally, reducing weather-driven power consumption by 1.4 Bcf/d week/week, according to EBW.

But ensemble models still favor the continuation of colder-than-normal weather into the Week 4 period. There’s uncertainty, however, over how far east cold anomalies will stretch, with recent model runs suggesting warmer weather across the Southeast by early March, according to EBW.

The colder-than-normal weather may help limit the impact of structural oversupply. “Over time, however, further loses are likely,” EBW CEO Andy Weissman said.

Cash Mixed as Cold Looms

Cash prices across the country were mixed Thursday as pricing hubs in the country’s midsection strengthened with the forecast arrival of cold beginning Friday. Gains were smallest in the Midwest, however, as Chicago Citygate rose just 2.5 cents to $2.595.

Midcontinent points were stronger as NGPL Midcontinent spot gas jumped more than a dime to $2.465. Southern Star tacked on nearly a quarter to $2.555.

West Texas markets also gained ground with increases of about a dime at Waha, which averaged $2.030.

Most other markets across the country, however, remained in the red. Dominion South in Appalachia fell 3.5 cents to $2.380, while the Northeast’s Tennessee Zone 6 200L next-day gas was down 41.0 cents to $3.145.

In the Rockies, Northwest Sumas plunged more than $4 to $7.745 despite chilly, wet conditions lingering in the region, not to mention more than 0.6 Bcf/d in freeze-offs.

In California, SoCal Citygate next-day gas plunged $2.790 to $7.940, but that was still the highest-priced gas in the country. Malin lost $1.235 to fall to $7.510.