NEW YORK: US natural gas futures eased about 1% on Thursday on forecasts for less demand over the next two weeks than previously expected and on expectations gas flows to liquefied natural gas (LNG) export plants will remain low for a couple of months due to ongoing outages at Freeport LNG in Texas.

That small price decline came ahead of a government report expected to show an unusual build in stockpiles last week when unseasonably warm weather kept heating demand low. Utilities usually do not start adding gas to storage until late March or early April.

Analysts forecast US utilities added 4 billion cubic feet (bcf) of gas into storage during the week ended March 15. That would be the first build since November 2023 and compares with a decrease of 68 bcf in the same week last year and a five-year (2019-2023) average decline of 42 bcf for this time of year. If correct, that would leave gas stockpiles about 41% above normal levels for this time of year.

Freeport LNG said on Wednesday it anticipates two of the three liquefaction trains at Texas export plant will remain out of service for testing and repairs through May.

Front-month gas futures for April delivery on the New York Mercantile Exchange were down 1.6 cents, or 0.9%, at $1.683 per million British thermal units (mmBtu) at 9:04 a.m. EDT (1304 GMT).

Energy traders said futures were supported earlier in the week by a continued drop in US output after gas prices collapsed to a 3-1/2-year low in February.

In the spot market, mild weather and ample hydropower supplies in the West this week cut power prices at the Palo Verde hub in Arizona to $1.00 per megawatt hour (MWh) for Thursday and $2.50 for Wednesday, both the lowest since hitting a record low of negative $1.75 in May 2019.

Negative prices mean there is too much power in a region due to low demand and/or transmission constraints, and are used to encourage power generators to shut plants or pay to keep producing power.

Financial firm LSEG said gas output in the Lower 48 US states fell to an average of 100.2 billion cubic feet per day (bcfd) so far in March, down from 104.1 bcfd in February. That compares with a monthly record high of 105.5 bcfd in December 2023.

Meteorologists projected weather across the Lower 48 would remain mostly colder than normal through April 5. Traders noted, however, that colder-than-normal weather at the end of March was expected to average around 50 degrees Fahrenheit (10 Celsius) versus a normal 51 F (10.5 C), which is not that cold compared with temperatures in January and February.