U.S. natural gas futures dropped by 8% on Dec. 19 on forecasts for less cold weather than previously expected over the next two weeks that will likely reduce heating demand.

Front-month gas futures fell 52.8 cents, or 8%, to $6.072/MMBtu as of 9:20 a.m. ET, the lowest level since Dec. 9.

"The market is looking beyond the current cold snap and there's a belief that as cold as it's going to get, it's going to be a short-lived polar blast," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

"And so the market's already kind of looking beyond where the concerns are about the weather."

Data provider Refinitiv forecast 423 heating degree days, which are used to estimate demand to heat homes and businesses, over the next two weeks in the Lower 48 U.S. states, which is lower than the outlook on Dec. 16.

There's still uncertainty as to when we're going to see a restart for Freeport, Flynn added.

Freeport shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired to review the incident and suggest action.

After several delays from October to November to December, the company now says the plant is on track to restart by the end of the year.

Many analysts, however, do not expect Freeport to return until the first quarter of 2023 because the company still has a lot of work to do to satisfy federal regulators before the plant is ready to restart.

Once Freeport returns, demand for gas will jump. The plant can turn about 2.1 Bcf/d of gas into LNG for export, which is about 2% of U.S. daily production.

"A revival of last week's renewed strength in the dollar and late week selloff in the oil could spill further into the gas space," energy consulting firm Ritterbusch and Associates said in a note, but added "this doesn't look like a market ready to post a sustainable advance as the weather factor increasingly becomes the primary driver of price."

Gas futures were up about 62% so far this year as much higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's war in Ukraine.

Gas was trading at $32/MMBtu at the Dutch Title Transfer Facility (TTF) in Europe and $36 at the Japan Korea Marker (JKM) in Asia.

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