NEW YORK: US natural gas futures climbed about 4% to a one-month high on Thursday on a drop in daily output and forecasts for colder weather and higher heating demand over the next two weeks than previously expected.

That price increase came ahead of a federal report expected to show last week’s storage withdrawal was smaller than usual for this time of year because milder-than-normal weather kept heating demand low.

Analysts forecast US utilities pulled just 40 billion cubic feet (bcf) of gas out of storage during the week ended Dec. 29. That compares with a withdrawal of 219 bcf in the same week last year and a five-year (2018-2022) average decline of 97 bcf.

If correct, last week’s decrease would cut stockpiles to 3.450 trillion cubic feet (tcf), or 12.1% above the five-year average of 3.077 tcf for the time of year.

Front-month gas futures for February delivery on the New York Mercantile Exchange were up 10.4 cents, or 3.9%, at $2.772 per million British thermal units (mmBtu) at 7:49 a.m. EST (1249 GMT), putting the contract on track for its highest close since Dec. 1.

Even though prices were up for a third day in a row and late January is usually the coldest part of the year, many traders said winter futures for November-March likely already peaked at $3.608 per mmBtu on Nov. 1 due primarily to recent record production and ample supplies of gas in storage.

Financial firm LSEG said average gas output in the lower 48 US states had fallen to 107.3 billion cubic feet per day (bcfd) so far in January, down from a monthly record of 108.5 bcfd in December.

Meteorologists projected the weather would remain near to warmer than normal through Jan. 12 before turning colder than normal from Jan. 13-19.