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US Natural Gas Update: Futures Edge Higher Despite Larger-Than-Expected Storage Build

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US natural gas futures edged higher on Friday, despite a larger-than-expected storage build, a drop in power-burning demand, and a rise in output.

The front-month Henry Hub contract and the continuous front-month benchmark each rose 0.39% to settle at $3.099 per million British thermal units.

This comes following the US Energy Information Administration's Thursday Weekly Natural Gas Storage Report, which showed a net injection of 108 Bcf into storage for the week ended June 5, compared with consensus estimates of 101 Bcf.

The storage figures were also ahead of the five-year average for this period at 95 Bcf, and were just shy of the prior year's 110 Bcf, according to data compiled by Investing.com, which the market sees as a bearish signal.

According to the Energy Buyer's Guide, this was the largest weekly build of this season so far and pointed to "weaker natural gas consumption than preliminary estimates had implied," which they also said indicated stronger-than-expected wind and solar generation.

Meanwhile, fundamentals have softened further, with a 3.1 Bcf/d decline in power-burn demand, as temperatures turned milder over the past week. At the same time, natural gas output increased modestly, according to NRG Energy.

On the bullish front, US LNG Feedgas flows are expected to spike to 19.19 Bcf/d on Friday, according to estimates by the Bloomberg LNG Feedgas Model. This marks a major shift following several weeks of slow flows, with the 30-day moving average at 17.70 Bcf, amid ongoing spring maintenance across several leading LNG facilities.

Weather forecasts are once again pointing towards warmer-than-average temperatures across most of the country, from June 19 to June 25, according to the National Weather Service, which should add to cooling-led gas power demand.

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