US natural gas futures little changed on steady weather

US natural gas futures traded within a few cents of unchanged on Wednesday on forecasts for temperatures and heating demand to remain around the same levels as previously expected. Front-month gas futures fell 1.7 cents, or 0.6 percent, to settle at $2.906 per million British thermal units.
Thomson Reuters analysts on Wednesday kept their forecast for gas demand in the lower 48 US states next week around 120.9 billion cubic feet per day, similar to Tuesday's projection. That compares with an expected 113.0 bcfd this week. Included in the consumption outlook 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 9.4 bcfd this week, up 15 percent from a year earlier.
As temperatures warm, allowing freezing wells to return to service, Thomson Reuters projected production in the lower 48 US states would increase to 74.3 bcfd on Wednesday from as low as 71.1 bcfd last week when the cold reduced output by as much as 8 percent from the record high of 77.5 bcfd on December 26. US dry natural gas production and US consumption were both projected to rise to all-time highs with supplies reaching 80.4 bcfd and demand reaching 77.5 bcfd in 2018, the US Energy Information Administration said in its January Short Term Energy Outlook.
Analysts said utilities probably pulled 333 billion cubic feet of gas from storage during the frigid week ended on January 5, the biggest withdrawal for any week ever according to federal energy data going back to 1994. That would compare with a decline of 151 bcf a year earlier and a five-year average decrease of 162 bcf for that period.
If correct, the decline would cut stockpiles to 2.793 trillion cubic feet, about 12 percent below the 3.156 tcf five-year average for this time of year and the lowest total gas in storage for that week since 2008. Still, traders said supplies were more than adequate to meet heating demand this winter, especially if production remains near record highs and the latest weather forecasts for the rest of the season are correct.
Despite the brutal freeze at the start of the year, the National Weather Service (NWS) has projected US temperatures would remain mostly seasonal for the rest of the winter. The NWS projected heating degree days (HDDs) would total 1,569 during in January and February.