NEW YORK: US natural gas futures rose almost 3% on Friday on forecasts for colder weather and higher heating demand during the last week of January and as liquefied natural gas (exports) remain near record highs after global gas prices soared.

Traders noted that the U.S price increase came ahead of the long Martin Luther King Jr holiday weekend and despite forecasts for milder weather and lower heating demand next week than previously expected.

Front-month gas futures rose 7.1 cents, or 2.7%, to settle at $2.737 per million British thermal units. On Thursday, the contract closed at its lowest since Jan. 4.

For the week, the contract was up over 1%, putting it on track to rise for a third week in a row for the first time since October.

Data provider Refinitiv said output in the Lower 48 US states averaged 91.4 billion cubic feet per day (bcfd) so far in January. That is slightly below December’s eight-month high of 91.5 bcfd and is well below the all-time monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, will fall from 129.1 bcfd this week to 121.8 next week as the weather turns milder, before soaring to 133.3 bcfd in two weeks with temperatures expected to drop.

The amount of gas flowing to US LNG export plants averaged 10.6 bcfd so far in January, just shy of December’s 10.7-bcfd monthly record.

Those exports came as gas futures this week settled at an all-time high in Asia and their highest since October 2018 in Europe due to extreme cold in both regions, numerous LNG supply issues, a scarcity of available LNG vessels and delays at the Panama Canal.