NEW YORK: US natural gas futures edged up about 1% to a fresh 14-week high on Wednesday on another decline in output and forecasts for higher demand over the next two weeks than previously expected.

Demand was up with an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants and as hot weather in Texas boosted the amount of gas power generators burn to keep air conditioners humming.

Front-month gas futures for June delivery on the New York Mercantile Exchange rose 2.4 cents, or 1.1%, to $2.231 per million British thermal units (mmBtu) at 9:33 a.m. EDT (1333 GMT), putting the contract on track for its highest close since Jan. 29 for a fourth day in a row.

That also put the front-month up for a fifth day in a row for the first time since January and kept it in technically overbought territory for a fourth day in a row also for the first time since January.

Traders noted that if US crude prices continue to decline - crude futures were down about 11% over the past five weeks - some drillers could cut back on oil production in shale basins that also produce a lot of associated gas, like the Permian in Texas and New Mexico and the Bakken in North Dakota.

Any reduction in associated gas could cause overall gas output to decline since high crude prices enable energy firms to keep making money by drilling for oil even when gas prices are negative like they have been at the Waha hub in West Texas in recent days.

In Texas, the Electric Reliability Council of Texas (ERCOT) issued a Weather Watch for Wednesday “due to unseasonably high temperatures, high levels of expected maintenance outages during the spring shoulder months, and the potential for lower reserves.” That heat caused next-day power prices at the ERCOT North hub, which includes Dallas, to soar to an eight-month high of $400 per megawatt hour for Wednesday, up from $37 for Tuesday. Financial firm LSEG said gas output in the Lower 48 US states fell to an average of 96.8 billion cubic feet per day (bcfd) so far in May, down from 98.1 bcfd in April. That compares with a monthly record of 105.5 bcfd in December 2023. On a daily basis, output was on track to drop by around 3.5 bcfd over the past four days to a preliminary 16-week low of 94.3 bcfd on Wednesday.