U.S. Natural Gas Futures Pare Gains After Expected Storage Build
(Reuters) — U.S. natural gas futures pared gains after a federal report was largely in line with expectations of a smaller-than-usual storage build last week as hot weather kept cooling demand high.
Front-month gas futures <NGc1> for September delivery on the New York Mercantile Exchange were up 3.3 cents, or 1.3%, at $2.63 per million British thermal units (MMBtu) at 11:23 a.m. EDT (15:23 GMT).
The U.S. Energy Information Administration (EIA) said utilities added 35 billion cubic feet (Bcf) of gas into storage during the week ended Aug 11.
That was largely in line with the expected 34-Bcf build analysts had forecast in a Reuters poll and compares with an increase of 21 Bcf in the same week last year and a five-year (2018-2022) average increase of 41 Bcf.
Despite some expected cooling across much of the northeast region and heat moderation across Texas and surrounding regions, "the temperature factor still appears conducive toward storage surplus contraction," analysts at Ritterbusch and Associates said in a note.
Data provider Refinitiv forecast U.S. gas demand, including exports, would be little changed from 103.7 billion cubic feet per day (Bcf/d) this week to 103.8 Bcf/d next week. These numbers were significantly lower than Wednesday's forecast.
Refinitiv said average gas output in the Lower 48 states was 101.7 Bcf/d so far in August, nearly the same as the 101.8 Bcf/d in July, and not far from a monthly record of 102.2 Bcf/d in May.
Gas flows to the seven big U.S. LNG export plants have fallen from an average of 12.7 Bcf/d in July to 12.3 Bcf/d so far in August, mainly due to reductions at Venture Global LNG's Calcasieu facility in Louisiana. That compares with a monthly record of 14.0 Bcf/d in April.
The U.S. is on track to become the world's biggest LNG supplier in 2023 — ahead of recent leaders Australia and Qatar — as higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to the war in Ukraine.
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