NEW YORK: US natural gas futures fell about 2% to a fresh 20-month low on Friday ahead of the expiration of the front-month and a growing belief that there is more than enough gas in storage for the rest of the winter.

The February contract expires as the front-month on the New York Mercantile Exchange on Friday. Volatility often peaks near expiry because trading volumes are low.

In 2022, gas prices soared by a record 46% on the day the February contract expired before plunging 26% the next day when the March contract became the new front-month.

The weather, meanwhile, is expected to turn from warmer than normal now to colder than normal from Jan. 30 to Feb. 6 before turning warmer than normal again through mid-February.

That should keep heating demand mostly low, at least when the weather is warmer than normal, and allow utilities to continue pulling less gas from storage for at least a fourth or even fifth week in a row. Gas stockpiles were currently about 5% above the five-year (2018-2022) average and are on track to rise to 7% above normal in next week’s federal storage report.

The biggest wild card in the gas market remains when Freeport LNG’s liquefied natural gas (LNG) export plant in Texas will exit a seven-month outage caused by a fire in June 2022.