NEW YORK: US natural gas futures eased about 1% on Thursday on forecasts for less demand next week than previously expected.

That small price decline occurred despite a bearish federal report showing last week’s storage build was smaller than normal for the 14th time in 15 weeks after lower prices earlier this year prompted several producers to cut output.

The US Energy Information Administration (EIA) said utilities added 35 billion cubic feet (bcf) of gas into storage during the week ended Aug. 23.

That was less than the 39-bcf build analysts forecast in a Reuters poll and compares with an increase of 28 bcf in the same week last year and a five-year (2019-2023) average rise of 43 bcf for this time of year.

On its first day as the front-month, gas futures for October delivery on the New York Mercantile Exchange were down 2 cents, or 1.0%, to $2.077 per million British thermal units (mmBtu) at 10:36 a.m. EDT (1436 GMT).

That, however, was up about 8% from Wednesday’s settle when the less expensive September contract was still the front-month and puts the contract on track for its highest close since Aug. 21.

In the spot market, pipeline constraints caused next-day gas prices at the Waha hub in the Permian Shale in West Texas to average in negative territory again for a record 31st time this year.

Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020 and once in 2023.

Financial firm LSEG said gas output in the Lower 48 US states has slid to an average of 102.4 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July.

On a daily basis, output was on track to drop by about 1.7 bcfd over the past two days to a preliminary two-month low of 101.0 bcfd on Thursday. Analysts have noted that preliminary data is often revised later in the day.