US natural gas futures edged up to a more than one-week high on Thursday on forecasts that colder-than-normal weather will cover parts of the country through the second week of February. The rise came even though data showed a small storage draw for last week. The US Energy Information Administration said on Thursday that utilities pulled 119 billion cubic feet of gas from storage during the warmer-than-usual week ended on January 20, the least for that week since 2015.
That compared with the analysts' consensus estimate for a draw of 117 bcf in a Reuters poll and withdrawals of 202 bcf a year earlier and the five-year average of 176 bcf for that week.
On their second-to-last day as the front-month, gas futures for February delivery on the New York Mercantile Exchange rose 5.0 cents, or 1.5 percent, to settle at $3.382 per million British thermal units, its highest close since January 17.
That put the front-month contract up for a fourth day in a row, its longest winning streak since the start of December. The contract has gained about 8 percent since January 23.
Gas futures for March, which will soon be the front-month, were up about six cents at $3.40.
Despite recent forecasts for colder weather over the next two weeks, meteorologists expect January, February and March will be mostly warmer than normal.
So far, the November-through-March period is on track to be slightly colder than last year's record-warm winter but hotter than the 10- and 30-year averages.
Heating degree days totaled 1,822 so far this season, versus 1,773 during the same period last winter, a 30-year average of 2,045 and a 10-year average of 1,985, according to Thomson Reuters data.
Thomson Reuters projected US gas demand would fall this week to an average of 90.9 billion cubic feet per day from 96.2 bcfd last week, with temperatures moderating and power usage down. It should then rise to 106.1 bcfd next week, when forecasters say the weather will turn cold again.
After the power sector used a record amount of gas to generate electricity last year, analysts project it will burn less in 2017 because prices of the fuel are expected to be about 25 percent higher, making coal a cheaper alternative for many generators.
Analysts said they expected the amount of gas in storage to decline faster than normal this year, in part because exports are higher and production is lower.
US output averaged 70.5 bcfd over the past 30 days, compared with 72.8 bcfd a year earlier and 71.9 bcfd for the same period in 2015, according to Reuters data.
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