Natural gas futures were trading close to even early Wednesday as the latest forecasts continued to show mild temperatures dominating the Lower 48 through the first half of January. The February Nymex contract was off 0.3 cents to $2.441/MMBtu at around 8:45 a.m. ET.

NGI Morning Natural Gas Price & Markets Coverage

After undergoing a major warm shift over this past weekend, the weather models have since been “rather stable,” according to Bespoke Weather Services. The firm said temperatures through the first half of January are expected to come in 70 gas-weighted degree days warmer than five-year and 10-year norms. 

“We do still see the makings of a healthy” blocking pattern from the Arctic Oscillation and North Atlantic Oscillation, although it is “delayed a few days compared to forecasts from several days ago,” Bespoke said. “The blocking is believable, and could last a while given strong agreement on a major stratospheric warming, a known precursor to blocking events.

“This does not guarantee cold, however, as the pattern needs help from the Pacific side. For now, we see things evolving stormier for the eastern half of the nation, which can lead to more variability in the second half of January, muting high-end warmth down the road.”

NatGasWeather similarly viewed the latest forecast data as “little changed” overnight. Both the American and European models maintained a “solidly bearish pattern” for much of the country through around Jan. 11-12, showing “only minor bouts of cooling…and mainly over the West.”

The “next best opportunity” for more intense cold to move into the United States is around Jan. 13-15 “as colder weather systems initially track into the West but eventually reach the central and southern U.S.,” NatGasWeather said. “This would bring an increase in demand to seasonal levels, but for the pattern to be considered bullish colder air will need to also reach the East.

“It’s important the weather data shows stronger cold shots for the second half of January or the natural gas markets could again become frustrated this winter is failing miserably to provide sustained cold.”

Meanwhile, looking ahead to this Thursday’s Energy Information Administration (EIA) storage report, NGI’s model predicts a withdrawal of 124 Bcf for the week ended Dec. 25. That would compare with an 87 Bcf withdrawal recorded in the year-ago period and a five-year average pull of 102 Bcf.

If NGI’s estimate is confirmed, this would mark the fourth straight reported withdrawal to outpace the five-year average.

February crude oil futures were up 20 cents to $48.20/bbl at around 8:45 a.m. ET, while January RBOB gasoline was up fractionally to $1.3975/gal.