US natural gas futures held steady on Wednesday as the market waits for direction from a federal report expected to show a smaller than usual weekly storage draw.

Traders noted the market was flat despite the latest forecasts calling for less cold weather over the next two weeks than previously expected.

Analysts said utilities likely pulled just 28 billion cubic feet (bcf) of gas from storage during the week ended Nov. 22. That compares with a withdrawal of 70 bcf during the same week last year and a five-year (2014-18) average decline of 57 bcf for the period.

If correct, the decrease would cut stockpiles to 3.610 trillion cubic feet (tcf), 0.9% below the five-year average of 3.641 tcf for this time of year.

The US Energy Information Administration will release its weekly storage report at 12:00 p.m. EST (1700 GMT) on Wednesday, a day earlier than usual due to the US Thanksgiving holiday on Thursday.

On its first day as the front-month, gas futures in the most active contract for January delivery on the New York Mercantile Exchange were up 0.8 cents, or 0.3%, to $2.541 per million British thermal units at 7:27 a.m. EST (1227 GMT). On Tuesday when December was still the front-month, the contract closed at its lowest since October 28.

Analysts said stockpiles will likely return to a surplus over the five-year average during the next month or so as rising production enables utilities to leave more gas in storage.

Gas production in the US Lower 48 states eased to 95.6 billion cubic feet per day (bcfd) on Tuesday from a record 96.0 bcfd on Monday, according to data provider Refinitiv. That compares with an average of 95.3 bcfd last week.

With less cold coming, Refinitiv cut its projection for average gas demand in the Lower 48 states, including exports, to 114.4 bcfd for next week from its previous forecast of 117.8 bcfd on Tuesday.

That compares with a forecast of 107.5 bcfd for this week.

Gas flows to liquefied natural gas (LNG) export plants rose to 6.9 bcfd on Tuesday from a four-week low of 6.6 bcfd on Monday due mostly to brief declines at Cheniere Energy Inc's Sabine Pass in Louisiana and Corpus Christi in Texas, according to Refinitiv data. That compares with an average of 7.3 bcfd last week and an all-time daily high of 7.7 bcfd on November 2.

Pipeline flows to Mexico, meanwhile, edged up to 5.4 bcfd on Tuesday from 5.1 bcfd on Monday, according to Refinitiv data. That compares with an average of 5.4 bcfd last week and an all-time daily high of 6.2 bcfd on September 18.