NEW YORK: US natural gas futures eased about 3 percent on rising output and forecasts for mild weather over the next two weeks that should cause heating demand to decline through late February.
Gas futures for March delivery on the New York Mercantile Exchange fell 8.7 cents, or 2.5 percent, to settle at USD3.422 per million British thermal units (mmBtu). For the week, the contract fell about 21percent after dropping 17percent last week.
Earlier in the week, however, gas futures climbed for four days in a row due in part to the rapid drop in the amount of gas in storage.
Energy firms pulled a record 360 billion cubic feet of gas out of storage during the week ended January 30 to meet surging heating demand during an Arctic blast, putting stockpiles on track to drop from around 5percent above normal during the week ended January 23 to around 6percent below normal during the week ended February 6.
Energy analysts, however, have said mild weather could wipe out much of that storage deficit over the next month or so.
Energy firms stockpile gas during the summer (April-October) when demand is generally lower than daily output for use during the winter (November-March) when demand for heating is generally higher than daily output.
Financial firm LSEG said average gas output in the Lower 48 states climbed to 106.9 billion cubic feet per day (bcfd) so far in February, up from 106.3 bcfd in January. That compares with a monthly record high of 109.7 bcfd in December.
After extreme cold last week, meteorologists projected weather across the country would remain mostly warmer than normal through February 21. Temperatures in the US Northeast, however, were still expected to remain below normal for several more days.
LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 159.5 bcfd this week to 141.4 bcfd next week and 132.6 bcfd in two weeks.
The forecast for next week was higher than LSEG’s outlook on Thursday.
Average gas flows to the eight large US LNG export plants rose to 18.5 bcfd so far in February, up from 17.8 bcfd in January. That compares with a monthly record high of 18.5 bcfd in December.
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