NEW YORK: US natural gas futures gained about 2% to a one-week high on Wednesday on a decline in daily output and forecasts for colder weather in mid January than previously expected.
That price increase came despite forecasts for milder weather and lower heating demand this week and next than previously expected, and a small decline in the amount of gas flowing to US liquefied natural gas (LNG) export plants.
Traders noted mild weather this week and next should enable utilities to keep pulling less gas from storage in coming weeks because heating demand is currently lower than usual.
Analysts forecast there was about 11.6% more gas in storage than normal at this time of year.
Front-month gas futures for February delivery on the New York Mercantile Exchange were up 4 cents, or 1.6%, at $2.608 per million British thermal units (mmBtu) at 8:47 a.m. EST (1347 GMT), putting the contract on track for its highest close since Dec. 27.
A lack of big price moves in recent weeks has cut historic or actual 30-day close-to-close futures volatility to 44.6%, the lowest since September 2021 for a second day in a row.
Historic daily volatility hit a record high of 177.7% in February 2022 and a record low of 7.3% in June 1991.
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