US natural gas futures eased to a one-week low on Tuesday on forecasts for milder weather and less heating demand over the next two weeks than previously expected.

That price decline came despite a 3% rise in European gas prices to their highest since hitting a record in early October that should keep US liquefied natural gas (LNG) exports near record highs.

Front-month US gas futures fell 4.5 cents, or 1.2%, to $3.749 per million British thermal units (mmBtu) at 7:24 a.m. EST (1224 GMT), putting the contract on track for its lowest close since Dec. 7.

That decline cut the premium of March 2021 futures over April 2021 to a record low of 6 cents per mmBtu. The industry uses the March-April spread, known as the widow maker, to bet on the winter heating season when demand for gas peaks.

That puts the widow maker close to going into contango with summer contracts trading over winter contracts before winter officially begins on Dec. 21 with the winter solstice.

US natural gas futures rise more than 3% on soaring European prices

The industry calls the March-April spread the "widow maker" because rapid price moves resulting from changing weather forecasts have knocked some speculators out of business, including the Amaranth hedge fund, which lost over $6 billion on gas futures in 2006.

In recent months, global gas prices hit record highs as utilities around the world scrambled for LNG cargoes from the United States and elsewhere to replenish low stockpiles in Europe and meet surging demand in Asia, where energy shortfalls caused power blackouts in China.

US futures jumped to a 12-year high in early October but have retreated because the United States has plenty of gas in storage and ample production for winter. Overseas prices were trading about 10 times higher than US futures.

Analysts have said European inventories were about 20% below normal for this time of year, compared with just 3% below normal in the United States.

Looking ahead, many analysts said milder-than-normal weather in December will cause US utilities to leave enough gas in storage to allow stockpiles to reach above-normal levels in a week or two.

That would be the first time storage would be at above-normal levels since April.

Data provider Refinitiv said output in the US Lower 48 states has averaged 96.51 billion cubic feet per day (bcfd) so far in December, just shy of November's monthly record of 96.54 bcfd.

Refinitiv projected average US gas demand, including exports, would jump from 109.9 bcfd this week to 121.4 bcfd next week as the weather turns seasonally colder. Those forecasts were lower than Refinitiv's outlook on Monday.

The amount of gas flowing to US LNG export plants has averaged 11.8 bcfd so far in December now that the sixth train at Cheniere Energy Inc's Sabine Pass plant in Louisiana is producing LNG.

That compares to 11.4 bcfd in November and a monthly record of 11.5 bcfd in April.

Pipeline data from Refinitiv showed that gas flows to Freeport LNG's export plant in Texas were on track to drop to 0.4 bcfd on Tuesday from an average of 2.0 bcfd over the past week.

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