US natural gas prices pared earlier losses in after-hours trading on Thursday, but ended the day in negative territory as weather forecasts turned cooler, reducing demand forecasts for power generators that supply air conditioning, while a larger-than-expected storage injection added pressure on the market.
The front-month Henry Hub contract and the continuous contract both fell 1.74% to $2.765 per million British thermal units.
In the physical market, the Henry Hub weekly spot price rose 12 cents to $2.94/MMBtu on Aug. 19, the US Energy Information Administration said in its weekly report on Thursday. The August month-to-date average was $2.74/MMBtu, down 17 cents from the August 2025 average.
The Commodity Weather Group said forecasts had trended cooler, moving away from previously expected very hot conditions in the US South over the coming weeks. However, near-term heat is still expected to persist across the Southern US, and Texas' ERCOT expects electricity demand to exceed its 91.3-gigawatt record this weekend as heat indexes approach 110 degrees Fahrenheit, RBC Capital Markets analysts said.
In earlier trading, natural gas prices dropped sharply after the EIA reported a slightly larger-than-expected weekly increase in storage. US natural gas inventories rose 16 billion cubic feet in the week ended Aug. 14, compared with market expectations for an increase of 13-15 Bcf.
Total working gas in storage stood at 3,169 Bcf, down 28 Bcf, or 0.9%, from year-ago levels but 185 Bcf, or 6.2%, above the five-year average for the same week.
EIA said the average rate of injections into storage is 11% above the five-year average so far in the April-through-October refill season. If injections continue at the five-year average rate of 9.9 Bcf/d for the remainder of the refill season, inventories would reach 3,938 Bcf on Oct. 31, 185 Bcf above the five-year average of 3,753 Bcf for that date.
US production and imports remain strong. US lower-48 dry gas production stood at 112.1 Bcf/d Thursday, up 2.8% from a year earlier, Barchart said, citing BNEF data.
The EIA said total US natural gas supply was largely unchanged from the previous week at 116.6 Bcf/d, while dry gas production averaged 111.1 Bcf/d, with both measures changing by less than 1%. Net imports from Canada fell 0.2 Bcf/d, or 4% in the week ended Aug. 19.
Lower-48 natural gas demand was 83.4 Bcf/d Thursday, up 5.7% from a year earlier, Barchart said. EIA reported cooler temperatures in the Northeast and parts of the West offset above-average temperatures across the South in the week ended Aug. 19. Total natural gas demand declined slightly by 0.8 Bcf/d, or less than 1%, led by a 0.7 Bcf/d, or 1.5%, decline in power-sector demand.
On the LNG front, estimated net natural gas flows to US LNG export terminals were 17.5 Bcf/d Thursday, down 2.5% from the previous week. EIA said 34 LNG vessels departed US ports last week carrying a combined 129 Bcf of natural gas. That was down from 36 vessels carrying 134 Bcf the previous week.