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US natural gas futures climbed more than 2% on Wednesday on forecasts for colder weather over the next two weeks than previously expected.

That price gain came despite near record US output, a decline in US liquefied natural gas (LNG) exports this week, a 4% slide in European gas prices and forecasts for less US demand next week than previously expected.

Front-month gas futures rose 8.8 cents, or 2.4%, to $3.835 per million British thermal units (mmBtu) at 6:44 a.m. EST (1144 GMT). On Tuesday, the contract closed at its lowest since Dec. 7.

Global gas prices have soared to all-time highs over the last few months - most recently in Europe on Tuesday - as utilities around the world scrambled for LNG cargoes to replenish low stockpiles in Europe and meet surging demand in Asia, where energy shortfalls caused power blackouts in China.

US natural gas futures slip to one-week low on milder forecasts

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 11 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, the first above-normal storage levels since April.

Data provider Refinitiv said output in the US Lower 48 states has averaged 96.53 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 109.4 bcfd this week to 118.2 bcfd next week as the weather turns seasonally colder. Those forecasts, however, were lower than Refinitiv's outlook on Tuesday.

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.

This month's record-setting LNG feed gas came despite reductions this week at Sabine Pass and Freeport LNG's export plant in Texas.

With gas prices around $41 per mmBtu in Europe and $36 in Asia, compared with about $4 in the United States, traders said buyers around the world would keep purchasing all the LNG the United States can produce.

But no matter how high global gas prices rise, the United States only has the capacity to turn about 12.1 bcfd of gas into LNG.

Global markets will have to wait until later this year to get more when Venture Global LNG's Calcasieu Pass in Louisiana starts producing LNG in test mode.

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