NEW YORK: US natural gas futures rose nearly 3 percent on Friday, a day after hitting a 10-month low, as forecasts for colder weather through early January were expected to boost heating demand.

After closing lower in the three previous sessions, front-month gas futures for January delivery rose 6.9 cents, or 2.7 percent, to settle at $2.667 per million British thermal units.

Prices gained over 2 percent this week, the first weekly gain in three, though prices touched the lowest level since Feb. 22 at $2.568 per mmBtu on Thursday.

“Colder weather forecasts over much of the US next week promises to bring another round of elevated demand for heating and more large storage withdrawals,” Gelber & Associates said in a note.

Thomson Reuters forecast US gas consumption will rise to an average of 113.8 billion cubic feet per day (bcfd) next week from 101.7 bcfd this week.

Included in the consumption projection are US exports to Mexico and Canada via pipeline and the rest of the world as liquefied natural gas. US sales abroad were expected to average 10.4 bcfd this week, up about 39 percent from the same week a year ago.

“Short-term temperature outlook stretching to about Jan. 3 is maintaining bullish skew,” said Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates. “Rising production has been coming into increasing focus as major mitigation against extreme polar events as the winter proceeds.”

Production in the lower 48 US states averaged an all-time high of 76.6 bcfd over the past 30 days, according to Reuters data. Daily output peaked at 77.2 bcfd earlier this week.

Analysts said US utilities probably pulled 118 billion cubic feet of gas from storage during the week ended on December 22.

That compares with a year-earlier decline of 233 bcf and a five-year average decrease of 111 bcf for that period.

If correct, the decline would cut stockpiles to 3.326 trillion cubic feet, about 2.7 percent below the 3.417 tcf five-year average for this time of year.

Even though the amount of gas in storage is a little less than usual for this time of year, traders said there was more than enough fuel to meet heating demand this winter, especially if production remains near record highs and the latest weather forecasts for the full season are correct.

The National Weather Service (NWS) projected temperatures would remain mostly seasonal across much of the country in December, January and February. That follows two of the warmest winters on record in 2015-2016 and 2016-2017.—Reuters