NEW YORK: US natural gas futures declined more than 3% on Wednesday on forecasts for milder weather and lower heating demand over the next two weeks than previously expected amid a steady rise in production.

Front-month gas futures were down 9.0 cents, or 3.2%, at $2.690 per million British thermal units by 10:00 a.m. EST (1500 GMT).

“The weather forecasts have been kind of warmer and are impacting prices now. The market needs more cold weather to work through of the amount of gas in storage,” a trader based in the US said.

Data provider Refinitiv estimated 436 heating degree days (HDDs) over the next two weeks in the lower 48 US states, below the 30-year average of 458. HDDs measure the number of degrees a day’s average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). The measure is used to estimate demand to heat homes and businesses.

Refinitiv projected average demand, including exports, would slip from 124.3 billion cubic feet per day (bcfd) last week to 119.8 bcfd this week as the weather turns milder before rising to 127.9 bcfd next week with the expected arrival of more cold.

Output in the Lower 48 US states has averaged 91.0 billion bcfd so far in December. That compares with a seven-month high of 91.0 bcfd in November 2020 and an all-time monthly high of 95.4 bcfd in November 2019.—Reuters