US natgas futures gain as supply losses expected to 'haunt' market

US natural gas futures gained on Friday, supported by concerns over tight supplies after the Arctic freeze disrupted oil and gas facilities, leading prices towards their fourth consecutive week of gains.

Prices were also supported as US pipeline gas exports to Mexico rose to 5.1 bcf on Friday after dropping to a 13-month low of 3.8 bcf per day on Tuesday, Refinitiv Eikon data showed.

Front-month gas futures rose 3.1 cents, or 1%, to $3.113 per million British thermal units at 10:46 a.m. EST, having declined 4.3% in the previous session, it's biggest one-day percentage decline since Jan. 19. Prices have gained about 7% so far this week.

"Even though we will see some warmer temperatures... there's still expectations that the loss in production is going to haunt us as we get into summer," said Phil Flynn, a senior analyst at Price Futures Group in Chicago.

"The market still showing concern about the production declines that occurred because of the Texas energy crisis."

Texas energy firms on Friday began to prepare for oil and gas production after days of frozen shutdowns as electric power and water service slowly resumed.

Production in warmer regions, such as Texas and the US Gulf Coast, is particularly susceptible to freeze-offs because the wellhead infrastructure is generally not winterized, Morgan Stanley analysts wrote in a note.

"Production freeze-offs should largely reverse over the coming week as temperatures return to levels more in line with seasonal norms," they said, adding the LNG exports, which represent about 70% of the demand declines, are expected to recover relatively quickly.

Preliminary data from Refinitiv showed production is expected to rise to 75.4 bcfd on Friday after collapsing to around 72.9 bcfd on Feb. 17, its lowest since August 2017.

Refinitiv estimated 383 heating degree days (HDDs) over the next two weeks in the Lower 48 US states, down from Thursday's forecast of 397 HDDs.

The normal is 366 HDDs for this time of year. HDDs measure the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). The measure is used to estimate demand to heat homes and businesses.