US natural gas prices ended their second consecutive week in the green, as weather-related momentum continued to support prices despite a bearish storage build.
In the futures market, the Nymex front-month contract ended the week at $2.76 per million British thermal units on Friday, up from $2.71/MMBtu on Aug. 14.
Natural gas spot prices increased to $2.94/MMBtu on Wednesday, up $0.12/MMBtu, according to the US Energy Information Administration's Weekly Gas Storage Supplement, released on Thursday.
This comes amid forecasts of above-normal temperatures expected to blanket almost the entire country, except for parts of the Northeast and Northwest, from Aug. 28 through Sept. 3, according to a report by the National Weather Service.
During the week as well, cooler temperatures across the Northeast and parts of the West offset above-average temperatures across the South, with total demand easing slightly by 0.8 billion cubic feet per day, due to lower power burn, according to data from S&P Global.
Meanwhile, gas output remained largely unchanged, averaging 116.6 Bcf/d, even as net imports from Canada declined slightly by 0.2 Bcf/d.
US LNG export feedgas flows continued to hover around 17.5 Bcf/d, below the 30-day moving average of 17.97 Bcf, as well as the Summer peak of 19 Bcf/d in April, according to the Bloomberg LNG Feedgas Model.
The net injection into storage for the week ended Aug. 14 was 16 Bcf, down significantly from last week's 36 Bcf, while bringing total gas inventories to 3,169 Bcf, according to the weekly EIA inventory data.
The net storage build overshot forecasts for a 15 Bcf injection, but came in below both the prior year's 19 Bcf build and the five-year average of 29 Bcf for the period, according to data compiled by Investing.com.
Only the East and the Midwest regions reported net injections of 15 Bcf and 19 Bcf, respectively, while most others, such as the Mountain, Pacific, and South Central, offset much of this with significant net withdrawals during the week ended Aug. 14.
At 3,169 Bcf, total US working gas in storage was 28 Bcf, or 1% below the same period last year, but 185 Bcf, or 6% above the five-year average for this period.
According to Pinebrook Energy Advisors, inventories remained healthy heading into the "fall shoulder season," with strong production and peak summer demand now firmly in the rearview mirror.
As a result, markets are likely to focus more on the prospect of comfortable storage levels heading into winter than on modest misses against weekly injection forecasts.
A total of 34 LNG carriers departed US ports during the week, down two from the prior week, with a total combined capacity of 129 Bcf, down 5 Bcf from last week.
Meanwhile, the US gas rig count was down by one, from 128 to 127, in the week ending Aug. 21, according to data from Baker Hughes (BKR) released Friday. That compares with 122 ga rigs in operation a year earlier.
The consolidated North American rig count, a key early indicator of future production levels, dropped by eight to 804 from 812 the previous week.
In international markets, European TTF gas prices averaged $21.11/MMBtu for the week ended Aug. 19, $1.36/MMBtu above the prior week. This week's average TTF price was the highest in over three years, since the week ending January 11, 2023, at $22.02/MMBtu.
Meanwhile, the Japan-Korea Marker averaged $21.60/MMBtu, about $0.41/MMBtu above the prior week.