NEW YORK: US natural gas futures were little changed on Friday as bullish forecasts for cooler weather and more demand next week than previously expected and a continued drop in output offset bearish negative spot power and gas prices and a massive oversupply of gas in storage.

Analysts forecast stockpiles were currently around 35% above normal levels for this time of year.

US gas production has dropped by around 10% so far in 2024 as several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March.

EQT is currently the biggest US gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy.

US drillers cut the number of gas rigs operating by three to 106, their lowest since December 2021, according to energy services firm Baker Hughes.

Front-month gas futures for May delivery on the New York Mercantile Exchange fell 0.5 cents, or 0.3%, to settle at $1.752 per million British thermal units (mmBtu).

That put the contract down about 1% for a second week in a row.

In the spot market, power and gas prices in many states, including Texas, California and Arizona, have traded below zero several times this spring due to low demand, ample renewable power supplies and pipeline maintenance that has trapped gas in Texas.

Next-day gas at the Waha hub in the Permian Shale in West Texas rose to negative 69 cents per mmBtu on Thursday, the ninth day in a row that Waha prices have averaged below zero, according to data from SNL Energy on the LSEG terminal.

In California, meanwhile, next-day power at South Path-15 (SP-15) in the southern part of the state plunged by about 107% to a one-week low of negative $1 per megawatt hour on Thursday.