U.S. natural gas futures eased to a seven-week low on Friday on forecasts for milder weather and lower demand over the next two weeks than previously expected and near-record output.

Front-month gas futures for January delivery on the New York Mercantile Exchange fell 2.9 cents, or 0.7%, to $3.879 per million British thermal units (mmBtu), putting the contract on track for its lowest close since October 29.

That kept the front-month back in technically oversold territory for a second day in a row.

For the week, the contract was down about 6% after dropping around 22% last week.

Looking forward, the market is showing signs that traders are not worried about having enough gas supplies in storage for the winter. The premium of futures for March over April 2026 (HGH26-J26) was trading at a record low of around 1 cent per mmBtu.

The industry calls the March-April spread the “widow-maker” because rapid price moves resulting from changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006.

Traders use the March-April and October-November (NGV26-X26) spreads to bet on winter weather forecasts and supply and demand. March is the last month of the winter heating season when utilities pull gas out of storage, and October is the last month of the summer cooling season when utilities inject gas into storage.

At the same time, gas futures for calendar 2026 (NGCALYZ6) fell to a 13-month low of $3.73 per mmBtu. That compares with a futures average of $3.60 so far in 2025, $2.41 in 2024, and $3.52 over the prior five years (2019-2023).

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states held at 109.6 billion cubic feet per day (bcfd) so far in December, the same as November’s monthly record high.

Meteorologists forecast weather across the country would remain mostly warmer than normal through January 3, keeping the amount of gas needed to heat homes and businesses lower than usual for this time of year.

LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 144.6 bcfd this week to 127.5 bcfd over the next two weeks. The forecast for next week was lower than LSEG’s outlook on Thursday.

Average gas flows to the eight large U.S. LNG export plants rose to 18.5 bcfd so far this month, up from a monthly record high of 18.2 bcfd in November.

That increase in LNG feedgas came despite what analysts called small gas flow declines at U.S. energy firm Venture Global’s
VG
1.6-bcfd Calcasieu and 3.2-bcfd Plaquemines plants in Louisiana in recent days. Officials at Venture Global were not immediately available for comment on the reductions.

In other LNG news, U.S. energy firm Energy Transfer ET.N said on Thursday it was suspending the development of its Lake Charles LNG export plant in Louisiana to focus on its investments in its pipeline business.
Source: Reuters