NEW YORK: US natural gas futures fell about 3% to a fresh two-month low on Tuesday on forecasts for less cold weather and lower heating demand over the next two weeks than previously expected.

Traders also noted that record output means US utilities don’t have to pull as much gas out of storage as usual to meet heating demand. Analysts forecast the amount of gas in US storage was about 8% above normal on Nov. 24.

On its last day as the front-month, gas futures for December delivery on the New York Mercantile Exchange fell 8.8 cents, or 3.1%, to settle at $2.706 per million British thermal units (mmBtu).

That put the contract at its lowest close since Sept. 26 and kept it in technically oversold territory with a Relative Strength Index (RSI) below 30 for a second day in a row for the first time since February.

Futures for January, which will soon be the front-month, were down about 12 cents to $2.83 per mmBtu.

One bearish factor that has weighed on the futures market for most of this year has been lower spot or next-day prices at the Henry Hub benchmark in Louisiana.

The spot market has traded below front-month futures for 189 out of 226 trading days so far in 2023, according to data from financial firm LSEG.