US natural gas futures dropped more than 3% to around $3.30/MMBtu, the lowest since October 17, as weather forecasts turned milder and reduced expectations for heating demand over the next two weeks. Forecasts point to warmer-than-normal temperatures across much of the US, especially in the South, with only a brief cold spell expected in parts of the central US between January 9 and 15. Conditions are then forecast to turn warmer again, with limited cold confined mainly to northern regions later in the month. This outlook has outweighed supportive supply signals. LNG exports remain near record levels, with gas flows to major export plants averaging about 18.5 bcfd in January. Domestic production has eased slightly, falling to 109.2 bcfd from December’s record. Meanwhile, the latest storage report showed a larger-than-normal withdrawal of 114 bcf, well above last year and the five-year average.
