NEW YORK: US natural gas futures fell 2% on Wednesday on forecasts for less heating demand next week than previously expected.
That small decline comes despite forecasts for a little more heating demand this week and an outlook that continues to call for temperatures to remain well below normal across much of North America through late February.
Front-month gas futures fell 5.6 cents, or 2.0%, to settle at $2.789 per million British thermal units.
In the spot market meanwhile, cold weather boosted next-day gas and power in New England to its highest since December 2019.
It also took gas at the Henry Hub benchmark in Louisiana, the Dominion South hub in southwest Pennsylvania and the AECO hub in Alberta, Canada, to the highest since March 2019.
Data provider Refinitiv said output in the Lower 48 US states has averaged 89.8 billion cubic feet per day (bcfd) so far in February.
Traders said that was down from 91.0 bcfd in January, due in part to the freezing of some wells. Output hit an all-time monthly high of 95.4 bcfd in November 2019.
With colder weather coming, Refinitiv projected average gas demand, including exports, would rise to 139.8 bcfd next week from 127.4 bcfd this week. That forecast for next week was lower than Refinitiv’s outlook on Tuesday.
The amount of gas flowing to US liquefied natural gas (LNG) export plants averaged 10.7 bcfd so far in February, up from January’s 10.4 bcfd average and on track to tie December’s 10.7 bcfd record high.
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