NEW YORK: US natural gas futures slipped more than 6% to a one-week low on Thursday on rising output and forecast for milder weather and less heating demand.

Front-month gas futures for May delivery on the New York Mercantile Exchange (NYMEX) fell 14.4 cents, or 6.7%, to settle at $2.011 per million British thermal units. The contract has fallen more than 9% this week.

“April and May are shoulder-season months and usually see very low weather-related demand. With supply the highest it has ever been for this time of the year and storage ending the withdrawal season at near high end of the five-year range, we see the market being very over supplied at this time,” said John Abeln, analyst with data provider Refinitiv.

“I really don’t see much upside for prices right now. I would be bearish in the near term until we see production start to come down significantly.”

Refinitiv said average gas output in the US Lower 48 states has risen to 99.9 billion cubic feet per day (bcfd) so far in April, up from 98.7 bcfd in March. That compares with a monthly record of 100.4 bcfd in January 2023.

The US Energy Information Administration (EIA) said utilities pulled 23 billion cubic feet (bcf) of gas from storage during the week ended March 23.

That was slightly higher than the 21-bcf withdrawal analysts forecast in a Reuters poll, and compares with 24 bcf withdrawal during the same week a year ago and a five-year (2018-2022) average of 0 bcf.

“We favor price consolidation at least for the next week or two. If there is a surprise or a big shift in the weather models, then we will see a price break,” said Robert DiDona of Energy Ventures Analysis.

Freeport LNG’s export plant, which shut in June 2022 after a fire, was on track to pull in about 2.24 bcfd of gas on Thursday, slightly down from 2.26 bcfd on Wednesday, according to data provider Refinitiv.

That was still above the 2.1 bcfd of gas Freeport LNG can turn into liquefied natural gas (LNG) for export. LNG plants can take in more gas than they can turn into LNG because they use some of the fuel to power equipment used to produce LNG.

Shell said it expects higher LNG output in the first quarter after outages at its Australian plants last year as well as stable earnings from LNG trading.