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US Natural Gas Update: Futures Edge Lower Amid Bearish Storage Build, Despite Bullish Weather Forecasts

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US natural gas futures edged lower on Friday, despite the higher-than-expected storage build, as weather forecasts remained bullish for the near-term.

The front-month Henry Hub contract and the continuous contract were both down 0.03% at $2.916 per million British thermal units. The front-month contract was set to end the week down by 0.64%.

The US Energy Information Administration released its Weekly Natural Gas Storage Supplement on Thursday, reporting a net injection of 32 billion cubic feet of working gas into storage, compared to forecasts of 29 Bcf, for the week ended July 17.

Storage figures witnessed a sharp decline from the prior week's 41 Bcf in net injection, but were above last year's 27 Bcf and the five-year average for this period at 30 Bcf, according to the data compiled by Investing.com.

This brought total US working gas inventories to 3,056 Bcf, which was 16 Bcf, or 1%, below the year-ago figure but 183 Bcf, or 6%, above the five-year average for this period, according to the EIA.

According to Pinebrook Energy Advisors, this week's figures imply "that market fundamentals tightened by nearly 1.5 Bcf per day from the previous week," which it said was largely the outcome of warmer temperatures and weaker wind power generation during the reporting period.

Weather forecasts expect above-normal temperatures to persist in the near-term, according to the National Weather Service, from July 31 through August 06, keeping space cooling demand elevated throughout this period.

Meanwhile, estimates for LNG export feedgas flows rose on Friday to 18.15 Bcf, up from earlier this week but still below the 30-day moving average of 18.33 Bcf, according to the Bloomberg LNG Feedgas Model.

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