U.S. natural gas futures rose on Friday in thin-volume trading and logged a weekly gain, ending a two-week losing streak, as forecasts pointed to colder weather and increased demand in the weeks ahead.

Front-month gas futures for January delivery on the New York Mercantile Exchange rose 12.4 cents, or 2.9% at $4.366 per million British thermal units. The contract was up 9.6% for the week.

Prices reached their highest level since December 11, at $4.593 in the previous session, before settling 3.8% lower for the day.

“There’s going to be thinner volume on the holiday week, meaning it will take less contracts to move the price materially, but the real storyline here again is the colder weather models, specifically for the eastern half of the U.S.,” said Robert DiDona, president of Energy Ventures Analysis.

Meteorologists forecast a slight drop in temperatures nationwide through January 10, with Heating Degree Days increasing from 377 on Wednesday to 398 on Friday, still below the normal level of 449, but forecasters anticipate colder weather in the days ahead.

“That colder pattern is certainly tightening balances as we approach year-end and into early January, which is a good sign for natural gas to be able to work back from the recent sell-off,” DiDona said.

Financial firm LSEG projected average gas demand in the lower 48 states, including exports, would rise from 136.1 bcfd this week to 138.5 bcfd over the next two weeks. The forecast for next week was higher than LSEG’s outlook on Wednesday.

LSEG said average natural gas output in the lower 48 U.S. states climbed to a record high of 109.8 billion cubic feet per day in December, surpassing November’s monthly record of 109.6 bcfd.

Average gas flows to the eight large U.S. liquefied natural gas export plants have risen to 18.4 bcfd so far this month, up from a monthly record high of 18.2 bcfd in November.

U.S. LNG exporter Freeport LNG confirmed on Wednesday that all three liquefaction trains at its 2.2-bcfd Texas plant have resumed operations following a temporary trip caused by a disruption in feed gas supply.

Meanwhile, natural gas speculators in four major NYMEX and ICE markets decreased their net long positions by 75,292 contracts to a total of 164,467 in the week ending December 16, according to data from the U.S. Commodity Futures Trading Commission released on Wednesday.

In other news, Russia has pushed back by “several years” a plan to reach an annual liquefied natural gas output target of 100 million metric tons, Deputy Prime Minister Alexander Novak told state TV on Thursday, citing the effect of Western sanctions on its energy industry.

Source: Reuters