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US Natural Gas Update: Futures Edge Down Amid Abundant Supply

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US natural gas futures fell in after-hours trade on Friday as inventories remained comfortably above historical norms and updated weather forecasts turned modestly milder, easing expectations for near-term cooling demand.

The front-month Henry Hub contract fell 1.13% to $2.883 per million British thermal units, while the continuous contract slipped 0.27% to $2.908/MMBtu.

The US Energy Information Administration reported a 32 billion cubic feet injection into storage for the latest reporting week, broadly in line with market expectations. Total inventories now stand 183 Bcf, or 6.4%, above the five-year average.

Weather also weighed on sentiment. Commodity Weather Group continues to forecast above-normal temperatures across the interior West through Aug. 7, although the latest outlook is cooler than previously expected, reducing projected cooling demand.

Total Lower 48 natural gas demand was 77.6 Bcf/d on Friday, down 3 Bcf from Thursday and 6.5% lower than a year earlier, Barchart said, citing BNEF data. Celsius Energy said average daily power burn for the week ended July 22 rose to 46.4 Bcf/d, up 1.9 Bcf/d from the corresponding week last year.

LNG feedgas flows strengthened Friday to nearly 18 Bcf/d, aided by higher nominations at Freeport LNG, which increased to 1.08 Bcf/d. Aegis Hedging said forward LNG feedgas demand is expected to average around 18.7 Bcf/d next week, with additional upside from activity at Golden Pass LNG and Corpus Christi.

On the supply side, production remained robust. Trading Economics said Lower 48 dry gas output has averaged 110.4 Bcf/d so far in July, up from 110.0 Bcf/d in June. BNEF data showed daily production reached 111.6 Bcf/d on Friday, up 0.7 Bcf/d from the previous day and 2.9% higher than a year earlier.

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