US natural gas futures fell to $4.12/MMBtu on Friday, easing from their highest in two years, but are still up more than 3% on the week, due to predictions of severe cold weather, expected to push demand to unprecedented levels.
US Natgas prices ease, set for weekly gain
Also, Federal data showed that utilities withdrew 258 billion cubic feet of gas from storage for the week ending January 10, a much higher figure than the 150 bcf withdrawn in the same week last year and well above the five-year average of 128 bcf. Analysts expect upcoming reports for the weeks ending January 17 and 24 to reveal even larger withdrawals, surpassing 200 bcf, due to rising heating needs.
Increasing heating demand
The forecasted colder-than-normal weather over the Martin Luther King Jr. Day weekend could disrupt gas production and pipelines, further increasing heating demand. At the same time, gas flows to the eight major US LNG export plants have reached an all-time daily high, adding to the surge in overall demand.
