US natural gas futures were little changed on Friday, but collapsed over 9 percent for the week on less cold forecasts later in the month. Front-month gas futures rose 0.9 cent, or 0.3 percent, to settle at $2.772 per million British thermal units. On Thursday, the contract fell to its lowest settlement since October 27 on less cold forecasts for later in December.
That decline on Thursday helped push the front month down about 9.4 percent for the week, its biggest weekly decline since February. Last week, when the weather forecasts were still projecting more cold this month, the contract rose almost 9 percent.
Thomson Reuters analysts boosted their projection for next week's US gas consumption to an average of 112.7 billion cubic feet per day from 111.6 bcfd on Thursday on forecasts for more heating demand than previously forecast. That compared with expected usage of 93.8 bcfd during the more mild weather this week and a forecast 108.7 bcfd in two weeks.
Included in the consumption projections are US exports to Mexico and Canada via pipeline and the rest of the world as liquefied natural gas. US sales abroad were projected to average 9.4 bcfd this week, up 24 percent from a year earlier. Production in the lower 48 US states averaged an all-time high of 76.1 bcfd over the past 30 days, according to Reuters data. Daily output peaked last week at 76.8 bcfd.
Analysts said utilities probably pulled a smaller than usual 60 billion cubic feet of gas from storage during the week ended on December 8, the smallest decline for that week since 2015. That compared with a year-earlier withdrawal of 132 bcf and a five-year average decrease of 78 bcf for that period. If correct, that decline would cut stockpiles to 3.635 trillion cubic feet, just 0.5 percent below the 3.753 tcf five-year average for this time of year.
Even though the amount of gas in storage is a little less than usual for this time of year, traders said that should be more than enough to meet heating demand this winter, especially if production remains near record highs and the latest weather forecasts for the full season are correct. The National Weather Service (NWS) projected temperatures would average a little above normal in December, January and February across much of the country, but lower than the winters in 2015-2016 and 2016-2017, which were among the warmest on record.
The NWS projected heating degree days (HDDs) would total 2,344 during the winter months. That compared with 2,097 HDDs during the same period last year, 2,079 two years ago and a 10-year average of 2,370. HDDs measure the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 Celsius). The measure is used to estimate demand to heat homes and businesses.
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