March natural gas futures rebounded from Tuesday’s 15.8-cent slide to gain 7.6 cents on Wednesday. The prompt-month contract closed the regular session at $5.386.

Natural gas futures traders still find themselves wading through mixed fundamentals. Factors such as the recent stout storage withdrawals and colder-than-normal temperatures are having trouble gaining traction when storage levels are still healthy and the domestic production scene has become brighter with the arrival of shale gas.

“We’re seeing a lot of small back and forths here, but I’m still cautiously negative on the natural gas futures market,” said Tom Saal, a broker with Hencorp Futures in Miami. “We’re getting some terrifically cold weather this winter; likely the coldest we’ve seen since the inception of the natural gas futures contract back in April of 1990.”

However, Saal said the market is not reacting like one might expect. “Despite all of this cold, the market is kind of stable here,” he told NGI. “In the years past, prices would have skyrocketed. They haven’t, so when the weather does moderate the market ought to drift lower.”

Even though prices haven’t skyrocketed in the face of extended periods of frigid cold, Saal said the bears are not having their way either. “There are no winners as far as I’m concerned. The bulls have been unable to run this thing up despite steep storage withdrawals, but conversely, the bears — backed by still comfortable inventory levels — would like this thing a dollar or two lower. The market has stayed within a really tight range, so I’d call this winter a draw so far.”

Heading into Thursday morning’s natural gas storage report for the week ending Feb. 12, it appeared that much of the industry was looking for a withdrawal of just less than 200 Bcf. A Reuters survey of 23 industry players produced a withdrawal range of 150 Bcf to 208 Bcf with an average expectation of 190 Bcf.

Bentek Energy is projecting a withdrawal of 204 Bcf, which would bring inventory levels to 2,011 Bcf. The research firm said it anticipates a 110 Bcf draw in the East Region, a 73 Bcf draw in the Producing Region and a 21 Bcf draw in the West Region.

Citi Futures Perspective analyst Tim Evans said he is expecting a 190 Bcf draw. The number revealed Thursday morning at 10:30 a.m. EST will be compared to last year’s date-adjusted withdrawal of 43 Bcf and the five-year average withdrawal of 128 Bcf.

Bullish traders were pleased with the 8:30 a.m. EST release of January housing starts figures from the Commerce Department. Expectations had been that the data would show starts at a seasonally adjusted annual rate of 580,000 units, above December’s 557,000 level. The actual figure came in at 591,000, but there was no immediate market impact. In January 2009 housing starts were at approximately 500,000 units on an annual basis. However, going back two years to January 2008 housing starts were running at an annual clip of more than one million units.

Matt Rogers, president of Commodity Weather Group, said in his morning report that “the big picture pattern is steady-state [Wednesday] with a cold-prevailing Eastern pattern. However, the six-to 10-day did expand the much belows [normal temperatures] south and east, while the 11-to 15-day reduced the below normals along the Northern tier.”

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.