NEW YORK: US natural gas futures fell over 5% to a two-week low on Wednesday as output slowly increased after weeks of reductions from freezing wells and on forecasts for slightly less cold weather and lower heating demand than expected in the next two weeks.

After weeks of near record volatility, front-month gas futures for March delivery fell 23.9 cents to settle at $4.009 per million British thermal units (mmBtu), their lowest close since Jan. 21.

The American Public Power Association (APPA) industry trade group said it asked the US Commodity Futures Trading Commission (CFTC) to investigate natural gas trading activity on Jan. 27 when prices spiked by a record 46%.

In the spot market, frigid weather and high heating demand in the US Northeast have kept next-day power and gas prices in New York and New England at or near their highest levels since January 2018. Those high prices have made it economic for the region’s power generators to burn lots of expensive oil and liquefied natural gas (LNG) this winter.

Data provider Refinitiv said output in the US Lower 48 states fell from a record 97.3 billion cubic feet per day (bcfd) in December to 93.9 bcfd in January and 90.8 bcfd in February after wells in several producing regions froze, including the Permian in Texas and New Mexico, the Bakken in North Dakota and the Appalachia in Pennsylvania, West Virginia and Ohio.

Output has been rising almost daily since it dropped to 86.3 bcfd during a winter storm on Feb. 4, its lowest since February 2021.

With the cold weather moderating, Refinitiv projected average US gas demand, including exports, would drop from 130.0 bcfd this week to 122.6 bcfd next week. The forecast for this week was lower than Refinitiv’s outlook on Tuesday.

The amount of gas flowing to US LNG export plants rose to an average of 12.5 bcfd so far in February, which would top the monthly record of 12.4 bcfd in January, as liquefaction trains at Venture Global LNG’s Calcasieu Pass plant in Louisiana enter service.