The futures increase, however, came despite forecasts for less heating demand over the next two weeks than previously expected. Front-month gas futures rose 8.8 cents, or 3.1 percent, to settle at $2.923 per million British thermal units. Analysts said utilities probably pulled 332 billion cubic feet of gas from storage during the frigid week ended on January 5, the biggest withdrawal for any week ever, according to federal energy data going back to 1994.
That would compare with a decline of 151 bcf a year earlier and a five-year average decrease of 162 bcf for that period. If correct, the decline would cut stockpiles to 2.794 trillion cubic feet, 11.5 percent below the 3.156 tcf five-year average for this time of year and the lowest total gas in storage for that week since 2009.
Still, traders said supplies were more than adequate to meet heating demand this winter, especially if production remains at record highs and the latest weather forecasts for the rest of the season are correct. The National Weather Service has projected temperatures would remain mostly seasonal for the rest of the winter.
Thomson Reuters analysts on Tuesday cut their forecast for gas demand in the lower 48 US states next week to 120.0 billion cubic feet per day from 122.0 bcfd as the weather was expected to turn less cold. That compares with an expected 113.5 bcfd this week.
Included in the consumption projections are US exports to Mexico and Canada via pipeline and the rest of the world as liquefied natural gas. US sales abroad were projected to average 9.4 bcfd this week, up 15 percent from a year earlier.
As temperatures warm, allowing freezing wells to return to service, Thomson Reuters projected production in the lower 48 US states would increase to 74.6 bcfd on Tuesday from as low as 71.1 bcfd last week when the cold reduced output by as much as 8 percent from the record high of 77.5 bcfd on December 26.