April natural gas is set to open 2 cents lower Friday morning at $2.82 as traders focus on the last weeks of the withdrawal season and mull the likelihood of stout injections. Overnight oil markets rose.

Even with a hefty 200 Bcf or thereabouts withdrawal report expected for next week, analysts are still bearish on the market. “This market appeared to respond appropriately to [Thursday’s] bullish EIA storage report,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Thursday. “The 228 Bcf withdrawal was much larger than we had anticipated as the deficit against five-year averages stretched by a whopping 113 Bcf. Total supply has now dropped to 1.71 Tcf with another draw approaching 200 Bcf likely tabled for next week’s EIA report given this week’s extreme cold.

“But we will need to fine-tune this expectation in the light of a significant warmup that will begin tomorrow. These milder temps are generally expected to extend out to about the official beginning of the spring period. And as the market is forced to focus more on the supply side of the equation, an expected record pace of production will become a larger topic of conversation.

“Despite the fact that [Thursday’s] storage figure was appreciably larger than we had expected, it failed to alter our short-term bearish opinion of this market. We still favor fresh short positions at current levels within the $2.80-2.88 zone, risking to above $2.95 on a close only basis while leaving downside possibilities to the $2.50 area on the table. While the fundamental landscape has shifted with end-of-season supply now likely to come in below 1.5 Tcf, such a supply would be sharply upsized from last year’s bottom of about 0.825 Tcf,” he said.

Gas buyers for weekend power generation across the MISO footprint will likely have the challenge of balancing mild temperatures and strong, though highly variable, wind generation. “Cold high pressure will depart [Friday] supporting fair weather and moderating temperatures,” said WSI Corp. in its Friday morning forecast. “A west-southwest breeze ahead of a duo of Alberta Clipper-like systems may further moderate the cold weather during the weekend, as well as brush the upper Midwest with a chance of snow showers. Fair and mild, more spring like warmth may develop early next week with the potential for highs well into the 40s and 50s, even some 60s.

“Elevated, albeit variable, wind generation is expected during the next couple of days. Output may occasionally peak upward of 7-9 GW. Wind generation may drop off by Sunday morning, but conditions may increase early next week.”

Tom Saal, vice president at INTL FC Stone in Miami, in his work with Market Profile sees the market continuing its upward momentum and now approaching the week’s 150% breakout target of $2.881. “Wednesday was the fourth non-trend day in this lower price consolidation range, then followed by a 3-2-1 up day, inferring short-covering,” he said. “And we know who is net short big time!”

In overnight Globex trading April crude oil gained 15 cents to $50.91/bbl and April RBOB gasoline rose a penny to $1.8966/gal.