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US Natural Gas Update: Futures Edge Lower Amid Rising Output, Bearish Storage Forecasts

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US natural gas futures were down on Wednesday, amid a surge in output and bearish forecasts for weekly gas storage data.

The front-month Henry Hub contract and the continuous contract were both down 1.53% at $3.225 per million British thermal units.

This comes as natural gas output, across the Lower 48 states edged higher, with an average of 110 billion cubic feet per day, compared to 109.7 Bcf/d in May, according to Trading Economics, leading to downward momentum in prices.

The US Energy Information Administration's Weekly Natural Gas Storage Supplement, is expected to show a net build of 88 Bcf into storage, which if realized, would lead to inventories of 167 Bcf and 31 Bcf above the five-year average for this period, and the prior year, respectively, according to NRG Energy.

Weather conditions remain bullish, with almost the whole of the US expected to see above-normal temperatures from July 08 to July 14, according to the National Weather Service, forcing residents to rely on air conditioning, and leading to increased gas-fired power burn.

Temperatures in New York City, for instance, are forecast to hit 100 degrees Fahrenheit, or 38 degrees Celcius this week, the highest since 2012.

LNG feedgas flows are expected to remain elevated, at 19.15 Bcf on Wednesday, significantly ahead of the 30 day moving average of 18.40 Bcf, according to the Bloomberg LNG Feedgas Model.

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