NEW YORK: US natural gas futures slid about 2% on Thursday on forecasts for mild weather to continue through mid November, keeping heating demand lower than usual for this time of year and allowing utilities to keep adding more gas into storage than normal for a few more weeks.

Analysts forecast US utilities added 82 billion cubic feet (bcf) of gas into storage during the week ended Oct. 25. That compares with an increase of 77 bcf in the same week last year and a five-year (2019-2023) average rise of 67 bcf for this time of year.

If correct, that would be the first time utilities added more gas than usual into storage for two weeks in a row since October 2023. Those injections would boost stockpiles to about 5% above the five-year average.

Prior to last week, storage injections had been smaller than usual for 14 weeks in a row because many producers reduced drilling activities so far this year after average spot monthly prices at the US Henry Hub benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.

Front-month gas futures for December delivery on the New York Mercantile Exchange (NYMEX) fell 6.2 cents, or 2.2%, to $2.783 per million British thermal units (mmBtu) at 9:12 a.m. EDT (1312 GMT). On Wednesday, the contract closed at its highest since Oct. 4.

Open interest in NYMEX futures, meanwhile, rose to 1.670 million contracts on Oct. 29, the most since October 2018.

In the spot market, pipeline constraints caused next-day gas prices at the Waha hub in the Permian Shale in West Texas to fall into negative territory for a record 41st time this year.

Even though prices have turned negative five times so far in October, analysts have said they expect them to remain in positive territory more often now that the new Matterhorn gas pipe from the Permian to the Houston area was in service.

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

Financial group LSEG said average gas output in the Lower 48 US states eased to 101.7 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023. On a daily basis, however, output was on track to drop by 2.3 bcfd over the past three days to a preliminary two-week low of 101.0 bcfd on Thursday. Analysts noted preliminary data was often revised later in the day.