January natural gas was set to open within a penny of even Tuesday at around $2.826 amid varying predictions for a cold blast that could lift heating demand later this month.

“The overnight weather models were again a touch colder late this week into early next week, but then with major weather model differences after Dec. 22,” said NatGasWeather.com in a morning note to clients. “Specifically, the Global Forecast System was little changed in the way it spreads cold temperatures across the northern and eastern U.S. Dec. 23-26, retaining a rather chilly U.S. pattern with strong demand.

“However, the European model was notably milder over the eastern U.S. during this period, holding a warm ridge longer and stronger, thereby effectively having cold air pour across the western and central U.S. instead of aggressively advancing into the higher population East.”

Bespoke Weather Services counted some overnight gas-weighted degree day losses in the short- and medium-term outlook “as guidance continued to bounce around with the exact timing and intensity” of a break in the cold expected next week.

Thursday’s storage report from the Energy Information Administration, said Bespoke, “is expected to be a bit more supportive, which has helped firm up support near the $2.75 level as the market seems to have tightened a bit, and generally we see prices as likely trading between $2.75 and $2.88 until we get a more significant cold signal in the medium-range. We still see risk skewed a bit upwards with late-month cold, but it may take a few more days to be realized.”

Genscape Inc. said its updated Spring Rock daily pipe production estimates show Lower 48 production falling by about 1.1 Bcf/d Tuesday after surpassing 76 Bcf/d Sunday and Monday. Last week, maintenance on the Rover Pipeline, “a variety of Texas and Permian pipes and systems in the Gulf of Mexico drove production down to 74.9 Bcf/d by Dec. 8 [Friday], just days after the record high of 76.37 Bcf/d was established on Nov. 29.”

As far as Tuesday’s 1.1 Bcf/d drop, “nearly 0.37 Bcf/d of the declines are out of the Northeast, followed by a 0.17 Bcf/d drop in the New Mexico Permian, and both the Rockies and Texas showing 0.14 Bcf/d each,” Genscape said in a note to clients. The decline in Rockies production is “showing in nearly every basin in the region except the Bakken Shale, though no individual basin is showing more than a 100 MMcf/d day/day decline.”

From a technical perspective, “the colder weather may be settling in, but it may be too little too late” for natural gas, according to ICAP Technical Analysis analyst Brian LaRose. “If January is going to avoid fresh contract lows the bulls will need to prevent the narrow band of support at $2.725-2.723-2.720-2.717 from breaking.

“Fail to stage a reversal and we will have no choice but to set our sights on the densely packed band of targets stretching from $2.553 to $2.516,” he said. “Next stop down in this case is $2.657.”

January crude oil was set to open about 43 cents higher at around $58.42/bbl, while January RBOB Gasoline was up about 2 cents to around $1.7470/gal.