US natural gas futures on Thursday rose on a slightly bigger-than-expected weekly storage draw and forecasts for colder weather at the end of January. The US Energy Information Administration said utilities pulled 243 billion cubic feet of gas from storage during the week ended January 13, the most for that week since 2014 due primarily to rising exports and low production. That topped analysts' forecast for a draw of 231 bcf in a Reuters poll and compared with a decline of 175-bcf during the same week a year ago and the five-year average draw of 170 bcf for that week.
Front-month gas futures rose 6.6 cents, or 2 percent, to settle at $3.368 per million British thermal units. Meteorologists said the weather would remain mostly warmer than normal over the next week or so before turning colder than usual starting around January 28. They forecast temperatures in February would be near normal and March would be warmer than normal. The November through March period is on track to be colder than last winter's record-warm but with higher temperatures than the 10- and 30-year averages.
Heating degree days have totaled 1,691 so far this season, versus 1,561 HDDs during the same period last winter, a 30-year average of 1,845 HDDs and a 10-year average of 1,788 HDDs, according to Thomson Reuters data. Thomson Reuters projected US gas demand would fall from an average of 112.0 billion cubic feet per day last week to 96.0 bcfd this week and 89.7 bcfd next week as the weather moderates and the power sector uses less of the fuel.
After using a record amount of gas to generate electricity in 2016, analysts project the power sector would use less in 2017 because prices of the fuel are expected to be about 25 percent higher this year than last, making coal a cheaper alternative for many generators.
Analysts said they expected the amount of gas in storage to decline faster than normal this year, in part because exports are higher and production is lower. US output averaged 70.7 bcfd over the past 30 days, compared with 72.5 bcfd a year earlier and 71.9 bcfd for the same period in 2015, according to Reuters data.