US natural gas futures fell to their lowest in almost three weeks on Wednesday ahead of the US Thanksgiving Day holiday on forecasts for less heating demand over the next two weeks. Front-month gas futures fell 4.9 cents, or 1.6 percent, to settle at $2.968 per million British thermal units, their lowest close since November 2.
Thomson Reuters reduced its forecasts for US gas consumption for the next two weeks to an average of 91.1 billion cubic feet per day this week and 90.4 bcfd for next week. That compares with Tuesday's forecasts of 91.2 bcfd for this week and 91.8 bcfd for next week. Included in that consumption projection in US exports to Mexico and Canada via pipeline and the rest of the world as liquefied natural gas. US sales abroad were expected to average 10.0 bcfd this week, up 27 percent from the same week a year ago.
Production in the lower 48 US states needed to meet that demand averaged an all-time high of 75.7 bcfd over the past 30 days, according to Reuters data. Output peaked earlier this month at a daily high of 76.4 bcfd and has since remained near that level. Traders said the market was little changed by the weekly storage report from the US Energy Information Administration (EIA), which showed a draw that was slightly smaller than analysts estimated.
EIA said utilities pulled 46 billion cubic feet of gas from storage during the week ended November 17, the biggest draw for that week since 2000. That fell short of the 51 bcf withdrawal forecast by analysts in a Reuters poll and compares with a year-earlier build of 2 bcf and a five-year average decrease of 26 bcf for that period. The projected weekly decrease left stocks at 3.726 trillion cubic feet, or about 3.1 percent below the 3.847 tcf five-year average for this time of year.
EIA released the storage report a day ahead of usual because of the Thanksgiving holiday on Thursday. Even though the amount of gas in storage is less than usual for this time of year, some traders said that should be enough fuel to meet demand this winter, especially if production remains near record highs and the latest weather forecasts for the season are correct.
The National Weather Service expects temperatures in December, January and February to be warmer than normal or near normal across much of the country again this year, except for a colder than normal patch in a few states bordering Canada from Washington to Minnesota. The previous two winters (2015-2016 and 2016-2017) were among the warmest on record.
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