U.S. natural gas futures rose about 6% on Jan. 12 on forecasts for higher demand this week than previously expected, colder-than-normal weather coming in late January and uncertainty about when the Freeport LNG export plant in Texas will exit a seven-month outage.

That price increase came ahead of a federal report expected to show last week's storage withdrawal was much smaller than usual because the weather then was warmer than normal, keeping heating demand low.

Analysts forecast U.S. utilities pulled just 13 Bcf of gas from storage during the week ended Jan. 6. That compares with a decrease of 157 Bcf in the same week last year and a five-year (2017-2021) average decline of 157 Bcf.

If correct, last week's decrease would cut stockpiles to 2.878 Tcf, or 2.2% below the five-year average of 2.942 Tcf for this time of year.

Front-month gas futures for February delivery were up 20.6 cents, or 5.6%, to $3.877 per MMBtu at 8:40 a.m. EST. Earlier in the week, the contract closed at its lowest level since Dec. 30, 2021.

That continues last year's record volatility, with the contract now up or down more than 5% on five of the eight trading days in 2023.

That gain pushed the contract out of oversold territory and puts it on track to rise for a second day in a row for the first time since late December.

Daily volume in the U.S. Natural Gas Fund, an exchange-traded fund (ETF) designed to track the daily price movement of gas, rose to 21.1 million shares on Wednesday, its highest since February 2022, according to Refinitiv data.

That was the fifth most active day for the U.S. gas fund and follows a rise on Jan. 9 in shares outstanding to their highest since December 2020. Daily share purchases have entered the top 10 daily inflows three times already this year.

Traders said the biggest market uncertainty remains the restart date for Freeport LNG's export plant in Texas.

After several delays from October to November and then to December, Freeport now expects the facility to be back in operation in the second half of January, pending regulatory approvals.

Analysts, however, have long said Freeport, which shut in a fire on June 8, would probably return to service during the first or second quarter of 2023 because further work is required to satisfy federal regulators, including training staff in new safety procedures, before the plant can be restarted.

A growing number of analysts and other sources have said this week that they do not expect Freeport back until February or later.

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

Several vessels, including Prism Diversity, Prism Courage and Prism Agility, were waiting in the Gulf of Mexico to pick up LNG from Freeport. Some have been there since early November.