US natural gas futures eased on Tuesday to their lowest level in more than two weeks on forecasts for less heating demand than previously expected. Front-month gas futures fell 3.0 cents, or 1 percent, to settle at $3.017 per million British thermal their lowest close since November 3. Thomson Reuters lowered its forecasts for US gas consumption for the next two weeks to an average of 91.2 billion cubic feet per day this week and 91.8 bcfd for next week. That compares with Monday's forecasts of 91.5 bcfd for this week and 94.2 bcfd for next week.
Traders said they expected demand to be depressed this week by the US Thanksgiving Day holiday on Thursday. Included in that consumption is US exports to Mexico and Canada via pipeline and the rest of the world as liquefied natural gas. US sales abroad were expected to average 10.0 bcfd this week, up 27 percent from the same week a year ago.
Production in the lower 48 US states needed to meet that demand, meanwhile, averaged an all-time high of 75.6 bcfd over the past 30 days, according to Reuters data. Output peaked earlier this month at a daily high of 76.4 bcfd and has since remained near that level.
Analysts said utilities likely pulled 51 billion cubic feet of gas out of storage during the week ended November 17, which would be the biggest draw for that week since 2000. That compares with a year-earlier build of 2 bcf and a five-year average decrease of 26 bcf for that period.
The projected weekly decrease would leave stocks at 3.721 trillion cubic feet, or about 3 percent below the 3.847 tcf five-year average for this time of year. Even though the amount of gas in storage is less than usual for this time of year, some traders said that should be enough fuel to meet demand this winter, especially if production remains near record highs and the latest weather forecasts for the season are correct.
The National Weather Service expects temperatures in December, January and February to be warmer than normal or near normal across much of the country again this year except for a colder than normal patch in a few states bordering Canada from Washington to Minnesota. The previous two winters were among the warmest on record.
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