NEW YORK: U.S. natural gas futures edged up on Tuesday on forecasts for colder weather and higher heating demand over the next two weeks than previously forecast before the long Martin Luther King Jr Day holiday weekend. In a reminder of last winter’s February freeze, traders noted daily gas demand was expected to reach record highs on Friday as frigid weather blankets much of the United States later this week.

Front-month gas futures for February delivery on the New York Mercantile Exchange (NYMEX) rose 4.1cents, or 1.0%, to $4.303 per million British thermal units (mmBtu) at 8:56 a.m. EST (1356 GMT). Speculators last week covered their shorts and boosted their net long futures and options positions on the NYMEX and Intercontinental Exchange by the most in a week since June as the front-month soared 9% in volatile trade, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.

During the February freeze, gas futures climbed a bit - gaining as much as 7% on Feb. 16 - but did not soar like the spot market. Next-day gas jumped to record highs in several parts of the country - gaining over 1,100% on Feb. 12 at the Waha hub in West Texas - as Winter Storm Uri left millions without power and heat for days after freezing gas wells and pipes in Texas and other U.S. central states. In the spot market, frigid weather and high heating demand in the U.S. Northeast kept next-day power and gas prices in New York and New England at or near their highest since January 2018 for much of the past week. Traders noted more cold was on the way later this week and next.

Lingering cold since New Year’s Day continued to cause well freeze-offs and other weather-related production declines in several regions, including the Permian in Texas and New Mexico, the Bakken in North Dakota and Appalachia in Pennsylvania, West Virginia and Ohio. Data provider Refinitiv said output in the U.S. Lower 48 states averaged 94.6 billion cubic feet per day (bcfd) so far in January, down from a record 97.6 bcfd in December. With even colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 135.6 bcfd this week to 143.2 bcfd next week as homes and businesses crank up their heaters. On a daily basis, Refinitiv projected total U.S. gas demand plus exports would reach 153.4 bcfd on Jan. 21, which would top the 149.8 bcfd high seen so far this year on Jan. 7 and the current record of 150.6 bcfd on Jan. 30, 2019.