NEW YORK: US natural gas futures edged up on Thursday with a small decline in output after dropping to a three-month low in the prior session as the market awaited direction from a federal report expected to show a bigger than usual storage withdrawal during last week’s colder than normal weather.

That price increase came despite forecasts for milder weather and less heating demand over the next two weeks than previously expected, an easing of gas prices overseas and a small decline in liquefied natural gas exports.

Analysts forecast that US utilities pulled 57 billion cubic feet (bcf) of gas from storage during the week ended Nov. 26. That compares with a decline of 4 bcf in the same week last year and a five-year (2016-2020) average decline of 31 bcf.

If correct, last week’s injection would reduce stockpiles to 3.566 trillion cubic feet (tcf), which would be 2.3% below the five-year average of 3.650 tcf for this time of year. After plunging 24% during the first three days of the week, front-month gas futures rose 3 cents, or 0.7%, to $4.288 per million British thermal units (mmBtu) at 6:49 a.m. EDT (1149 GMT). On Wednesday, the contract closed at its lowest since Aug. 26.

In recent months, global gas prices hit record highs as utilities around the world scrambled for LNG cargoes to replenish extremely low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China.

Following those global gas prices, US futures jumped to a 12-year high in early October, but have since pulled back because the United States has plenty of gas in storage and ample production for the winter. Overseas prices were trading about seven times higher than US futures.

Analysts have said European inventories were about 17% below normal for this time of year, compared with just 2% below normal in the United States.

Data provider Refinitiv said output in the US Lower 48 states averaged 95.8 billion cubic feet per day (bcfd) so far in December, down from a monthly record of 96.5 bcfd in November.

Refinitiv projected average US gas demand, including exports, would rise from 111.8 bcfd this week to 112.7 bcfd next week as the weather turns seasonally colder and homes and businesses crank up their heaters. Those forecasts were much lower than Refinitiv’s forecast on Wednesday. The amount of gas flowing to US LNG export plants averaged 11.0 bcfd so far in December, down from 11.4 bcfd in November and a monthly record of 11.5 bcfd in April.

With gas prices around $30 per mmBtu in Europe and $36 in Asia, compared with about $4 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States can produce.

But no matter how high global gas prices rise, the United States only has the capacity to turn about 11.1 bcfd of gas into LNG. The rest of the gas flowing to the export plants is used to fuel equipment that produces the LNG. Global markets will have to wait until later this year to get more when Venture Global LNG’s Calcasieu Pass in Louisiana starts producing LNG in test mode.