US natgas futures ease on milder weather forecasts for next week

US natural gas futures eased on Wednesday on forecasts for milder weather and lower heating demand than previously expected for next week.

That small price decline came despite record liquefied natural gas (LNG) exports and forecasts for colder weather and higher than previously expected heating demand this week.

Front-month gas futures fell 1.6 cents, or 0.6%, to $2.546 per million British thermal units at 7:13 a.m. EDT (1113 GMT).

Traders noted that prices were also under pressure from falling demand and rising output that cut weekly storage withdrawals to near zero this week and are likely to result in a small build next week. That compares with five-year (2016-2020) average decreases of 51 billion cubic feet (bcf) for the week ended March 19 and 24 bcf for the week ended March 26.

Data provider Refinitiv said that output in the Lower 48 US states has averaged 91.0 billion cubic feet per day (bcfd) so far in March, up sharply from a 28-month low of 86.5 bcfd in February, when extreme weather froze gas wells and pipes in Texas. That, however, was still much lower than the record monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would fall from 104.1 bcfd this week to 99.5 bcfd next week as the weather turns milder. The demand forecast for this week was higher than Refinitiv's estimate on Tuesday while its forecast for next week was lower.

The amount of gas flowing to US LNG export plants, meanwhile, has averaged 10.4 bcfd so far in March. That compares with a four-month low of 8.5 bcfd in February, when extreme cold cut power and gas supplies to the facilities, and a monthly record high of 10.7 bcfd in December.

On a daily basis, feedgas to LNG export plants was on track to rise to 11.27 bcfd, which would top the daily record of 11.25 bcfd hit in mid-December, preliminary Refinitiv data shows.