NEW YORK: US natural gas futures eased about 1 percent on Thursday on forecasts for less demand over the next two weeks than previously expected and ahead of a federal report expected to show energy firms added more gas to storage last week than normal for this time of year.

Front-month gas futures for December delivery on the New York Mercantile Exchange fell 1.8 cents, or 1 percent, to USD2.941 per million British thermal units (mmBtu). On Wednesday, the contract closed at its highest since October 20.

Analysts forecast energy firms added 81 billion cubic feet (bcf) of gas to storage during the week ended October 30.

That compares with an increase of 39 bcf during the same week last year and a five-year (2021-2025) average increase of 61 bcf for the period.

Financial firm LSEG said average gas output in the US Lower 48 states fell to 111.2 billion cubic feet per day (bcfd) so far in November, down from 113.4 bcfd in October and a monthly record high of 115.0 bcfd in August.

Record output and mild spring weather earlier this year allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March, with the level reaching a high of 7.7 percent above normal in April.

But hotter-than-normal weather over the summer forced energy firms to pull large amounts of gas from storage to fuel power plants to keep air conditioners humming, cutting the inventory surplus. About 40 percent of US power generation comes from gas-fired plants.

With the return of mild weather and low demand, energy firms added more gas to storage than usual in recent weeks. The amount of gas in storage likely climbed to 1.5 percent above normal during the week ended October 30, up from 1.0 percent above normal in the previous week, according to analyst estimates ahead of Thursday’s weekly federal inventory report.

Looking ahead, meteorologists predicted weather across the country would remain warmer than normal through November 20, which should keep heating demand lower than usual in coming weeks.

Still, with seasonally colder weather coming, LSEG said average gas demand in the Lower 48 states, including exports, would rise from 106.9 bcfd this week to 114.3 bcfd next week. Those forecasts were lower than LSEG’s outlook on Wednesday.—Reuters