US natural gas futures rose on Thursday and were on track for their best year since 2016, helped by forecasts for slightly colder weather than previously expected and record liquefied natural gas (LNG) exports.

Front-month natural gas futures for February delivery rose 5.9 cents, or 2.4%, to $2.481 per million British thermal units by 10:01 a.m. EST (1501 GMT). For the year, the contract is up 13%, its biggest yearly percentage rise since 2016. The market will be closed on Friday for New Year's Day.

"While demand is not expected to change much over the next few days, lower supply and the potential for a colder second half of January is giving the market a lift this morning ahead of today's storage report," said Robert DiDona of Energy Ventures Analysis.

Data provider Refinitiv estimated 381 heating degree days (HDDs) over the next two weeks in the Lower 48 US states, up from Tuesday's forecast of 371 HDDs. The normal is 461 HDDs for this time of year. 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.

"Couple that insight with today being the last trading day of 2020 and we are seeing increased volatility early in the session," DiDona added.

However, Refinitiv projected average demand, including exports, would slip from 123.0 billion cubic feet per day (bcfd) this week to 117.8 bcfd next week.

The amount of gas flowing to US LNG export plants, meanwhile, has averaged 10.7 bcfd in December, which would top November's 9.8 bcfd record as rising prices in Europe and Asia in recent months have prompted global buyers to buy more US gas.

Output in the Lower 48 has averaged 91.1 billion bcfd in December. That compares with a seven-month high of 91.1 bcfd in November 2020 and an all-time monthly high of 95.4 bcfd in November 2019.