US natural gas futures mostly steady

US natural gas futures held mostly steady on Wednesday as record production offset expectations that colder-than-normal weather will continue through the third week of December. Front-month gas futures rose 0.8 cents, or 0.3 percent, to settle at $2.922 per million British thermal units.
The latest weather forecasts projected temperatures would remain below normal through at least December 21. Thomson Reuters analysts, however, reduced their projection for next week's US gas consumption to an average of 111.4 billion cubic feet per day from 112.5 bcfd on Tuesday on forecasts for lower heating demand than previously forecast.
That compared with expected usage of 93.7 bcfd during the mild weather this week. Included in the consumption projections are US exports to Mexico and Canada via pipeline and the rest of the world as liquefied natural gas. US sales abroad were projected to average 9.3 bcfd this week, up 22 percent from a year earlier.
Production in the lower 48 US states that is needed to meet that demand averaged an all-time high of 76.1 bcfd over the past 30 days, according to Reuters data. Output peaked last week at a daily high of 76.8 bcfd. Analysts said utilities probably pulled just 7 billion cubic feet of gas from storage during the week ended on December 1, the smallest draw for that week since 2001.
That compared with a year-earlier withdrawal of 43 bcf and a five-year average decrease of 69 bcf for that period.
If correct, the weekly decline would leave stockpiles at 3.686 trillion cubic feet, or about 1.2 percent below the 3.731 tcf five-year average for this time of year. Even though the amount of gas in storage is less than usual for this time of year, some traders said that level should be more than enough to meet heating demand this winter, especially if production remains near record highs and the latest weather forecasts for the full season are correct.
The National Weather Service (NWS) projected that temperatures would average a little above normal in December, January and February across much of the country, but lower than the winters in 2015-2016 and 2016-2017, which were among the warmest on record. The NWS projected heating degree days (HDDs) would total 2,344 during the winter months. That compared with 2,097 HDDs during the same period last year, 2,079 two years ago and a 10-year average of 2,370.