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U.S. natgas eases from 7-week high on milder weather forecasts

U.S. natural gas futures eased on Friday from a seven-week high in the previous session on forecasts for the weather to moderate over the next two weeks.

That small decline came despite a smaller-than-expected storage build, record exports and small declines in production.

Traders also noted that colder-than-normal weather this week boosted heating demand by so much that utilities could take the unusual step of pulling gas from storage. The last time utilities pulled gas from storage in April was in 2018.

Front-month gas futures NGc1 fell 1.9 cents, or 0.7%, to settle at $2.730 per million British thermal units. On Thursday, the contract closed at its highest since March 3.

For the week, the front-month was up about 2% after rising 6% last week.

Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.4 billion cubic feet per day (bcfd) so far in April, down from 91.5 bcfd in March. That compares with a record monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would fall from 98.1 bcfd this week to 90.5 bcfd next week and 87.6 bcfd in two weeks as the weather turns seasonally milder. The forecast for next week was higher than Refinitiv projected on Thursday.

The amount of gas flowing to U.S. LNG export plants averaged 11.5 bcfd so far in April, which would top the monthly record of 11.2 bcfd in March.

Analysts said LNG feedgas looks set to break March’s record in April even though flows were expected to decline later this month due to planned work on a couple of facilities and the pipelines serving them, including Cheniere Energy Inc’s LNG.A plants in Texas and Louisiana and Cameron LNG’s plant in Louisiana.

U.S. pipeline exports to Mexico, meanwhile, averaged 6.1 bcfd so far in April, up from 5.9 bcfd in March and on track to top the monthly record of 6.0 bcfd in September 2020, according to Refinitiv data.
Source: Reuters (Reporting by Scott DiSavino; Editing by Kirsten Donovan)

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