NEW YORK: US natural gas futures fell about 2% to a three-week low on Monday on forecasts for less demand this week than previously expected, ample gas in storage and expectations gas flows to liquefied natural gas (LNG) export plants would remain low for another month or so.

Front-month gas futures for April delivery on the New York Mercantile Exchange fell 2.7 cents, or 1.6%, to $1.632 per million British thermal units (mmBtu) by 9:14 a.m. EDT (1314 GMT), putting the contract on track for its lowest close since Feb. 27.

But with gas prices little changed last week, speculators cut their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges for a fourth week in a row to their lowest since late January.

Prices fell as low as $1.511 per mmBtu on Feb. 27, their lowest since June 2020, as near-record output, mostly mild weather and low heating demand this winter allowed utilities to leave significantly more gas in storage than usual for this time of year.

Analysts estimated current gas stockpiles were around 41% above normal levels.

Those low prices will boost US gas use to a record high in 2024, but cut production for the first time since 2020 when the COVID-19 pandemic destroyed demand for the fuel, according to the US Energy Information Administration’s latest outlook.

Output was already down by around 4% over the past month as several energy firms, including EQT and Chesapeake Energy , delay well completions and cut back on other drilling activities.

In the spot market, mild weather in the US West cut next-day gas prices at the Southern California Border to $1.48 per mmBtu, their lowest since July 2020.

In Texas, meanwhile, low demand and pipeline maintenance trapped gas in the Permian basin, the nation’s biggest oil producing shale formation, causing next-day prices at the Waha hub in West Texas to drop below zero for a second time this month.