NEW YORK: US natural gas futures eased on Thursday ahead of a federal report expected to show last week’s storage withdrawal was near normal for this time of year, following a 3% drop in European gas prices.

That small US price decline came despite forecasts for more US demand over the next two weeks than previously expected.

Analysts forecast US utilities pulled 54 billion cubic feet (bcf) of gas from storage during the week ended Dec. 3. That compares with a decline of 78 bcf in the same week last year and a five-year (2016-2020) average decline of 55 bcf.

If correct, last week’s withdrawal would reduce stockpiles to 3.510 trillion cubic feet (tcf), which would be 2.4% below the five-year average of 3.595 tcf for this time of year.

Looking ahead, many analysts expect mild weather forecast for coming weeks will allow US utilities to leave enough gas in storage to cause stockpiles to reach above normal levels by mid-December. That would be the first time storage would be at above normal levels since April.

Front-month gas futures fell 3.4 cents, or 0.9%, to $3.781 per million British thermal units (mmBtu) at 7:08 a.m. EST (1208 GMT).

In recent months, global gas prices hit record highs as utilities around the world scrambled for liquefied natural gas (LNG) cargoes from the United States and elsewhere to replenish low stockpiles in Europe and meet surging 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 winter. Overseas prices were currently trading about nine 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 has averaged 96.3 billion cubic feet per day (bcfd) so far in December, down from a monthly record of 96.5 bcfd in November.

With an unusual warming expected in mid-December, Refinitiv projected average US gas demand, including exports, would drop from 117.0 bcfd this week to 110.3 bcfd next week. Those forecasts were higher than Refinitiv’s outlook on Wednesday.

The amount of gas flowing to US LNG export plants has averaged 11.9 bcfd so far in December now that the sixth train at Cheniere Energy Inc’s Sabine Pass plant in Louisiana is producing LNG. That compares to 11.4 bcfd in November and a monthly record of 11.5 bcfd in April.

With gas prices around $33 per mmBtu in Europe and $35 in Asia, compared with about $4 in the United States, traders said buyers around the world would 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.