NEW YORK: US natural gas futures slipped 1% on Monday as forecasts for milder weather and lower heating demand overshadowed optimism around a potential COVID-19 vaccine.

Front-month gas futures fell 2.9 cents, or 1%, to settle at $2.859 per million British thermal units. The contract touched its lowest since Oct. 20 at $2.821 earlier in the session.

"Prices are easing from early session short-covering as mid-day weather models are running and they continue to forecast a warmer than normal short-term pattern, which is not supportive given current supply and storage levels," said Robert DiDona of Energy Ventures Analysis.

"For prices to recover, we need to see a colder weather pattern shift for late November," he added.

Data provider Refinitiv estimated 216 heating degree days (HDDs) over the next two weeks in the lower 48 US states, well below the 30-year average of 278. Refinitiv predicted demand, including exports, would fall to an average of 91.6 billion cubic feet per day (bcfd) this week from 98.1 bcfd in the prior week.

Gas production in the Lower 48 US states has averaged 88.8 billion cubic feet per day so far in November, up from a five-month low of 87.4 bcfd in October.

Earlier in the day, Pfizer Inc announced its experimental vaccine was more than 90% effective in preventing COVID-19 based on initial data from a large study, boosting market sentiment among investors.

Meanwhile, the amount of gas flowing to US LNG export plants hit a record 10.2 bcfd last week and was expected to remain near that level in coming weeks after a rise in global prices in recent months prompted buyers in Europe and Asia to purchase more US gas.

In the spot market, mild weather this week cut next-day gas prices at the Dominion South hub in southwest Pennsylvania and Transco Z6 in New York to their lowest since October 2017 and September 2016, respectively.