US natural gas futures on Friday were little changed on mixed signals from weather models with one calling for more cold through mid-February while another pointed to less cold.
On its last day as the front-month, gas futures for February delivery on the New York Mercantile Exchange rose 0.9 cents, or 0.3 percent, to settle at $3.391 per million British thermal units.
Even though the gain was small it put the front-month up for a fifth day in a row to its highest settle since January 17. That was its longest winning streak since early December. For the week, the contract was up about 5 percent. Gas futures for March, which will now become the front-month, were down about 4 cents at $3.36.
Looking ahead, meteorologists expect January, February and March will be mostly warmer than normal. So far, the November-through-March period is on track to be slightly colder than last year's record-warm winter but hotter than the 10- and 30-year averages. Heating degree days totaled 1,847 so far this season, versus 1,797 during the same period last winter, a 30-year average of 2,074 and a 10-year average of 2,013, according to Thomson Reuters data.
Thomson Reuters projected US gas demand would rise from 90.6 billion cubic feet per day this week to 103.3 billion cubic feet per day next week and 105.7 bcfd in two weeks when forecasters expect the weather to turn colder. Analysts said utilities likely pulled about 94 billion cubic feet of gas from storage during the warmer-than-usual week ended on January 27, the least for that week since 2006.
That compared with withdrawals of 169 bcf a year earlier and the five-year average of 166 bcf for that week. Analysts said they expected the amount of gas in storage to decline faster than normal this year, in part because exports are higher and production is lower despite weaker power demand for the fuel. After the power sector used a record amount of gas to generate electricity last year, analysts project it will burn less in 2017 because prices of the fuel are expected to be about 25 percent higher, making coal a cheaper alternative for many generators.
US production averaged 70.5 bcfd over the past 30 days, compared with 72.9 bcfd a year earlier and 71.9 bcfd for the same period in 2015, according to Reuters data.m US exports, meanwhile, were up to 8 bcfd this week from 5.1 bcfd during the same week a year ago. Analysts expect the United States to become a net exporter of gas on an annual basis this year or next for the first time since 1957.
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