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US Natural Gas Update: Futures Fall on Larger-Than-Expected Inventory Build

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US natural gas futures weakened at midday Thursday after government data showed a larger-than-expected storage build, reinforcing expectations that supply remains ample heading into early summer.

The front-month Henry Hub contract and the continuous front-month benchmark both fell by 3.70% to $3.067 per million British thermal units.

The Energy Information Administration reported an injection of 108 billion cubic feet for the week ended June 5, above market expectations of roughly 95-101 Bcf. That compares with a 110 Bcf build in the same week last year.

Total working gas in storage now stands at 2,686 Bcf, roughly 5 Bcf, or 0.2%, below year-ago levels and 151 Bcf, or about 6%, above the five-year average.

The surplus to the five-year norm has rebounded to levels near April highs, with storage increases broadly tracking seasonal norms over the past six weeks, according to a note by Pinebrook Energy Advisors.

Gelber & Associates called the inventory figure the clearest bearish driver of the session, noting that it landed despite a firmer short-term demand setup earlier in the week.

"Power burn is the main source of support, with early-summer heat lifting generation demand and keeping total demand elevated in the front of the forecast," the firm said, adding that weather signals remain mixed.

Near-term heat is supporting demand, but forecasts show moderation beyond the front end of the two-week outlook.

NatGasWeather.com pointed to a strong high-pressure system dominating much of the US through Saturday, bringing highs in the 80-100 degrees Fahrenheit range, including 90-degree Fahrenheit plus readings across the Midwest and the East Coast.

It added that demand is expected to remain strong through the weekend before easing.

NRG reported power burn rising to 45.7 Bcf per day on Thursday, pushing total consumption higher. Despite the spike, overall balances remain broadly stable, reflecting what traders describe as a still-balanced supply-demand picture.

Dry gas production remains near 110 Bcf/d, while Canadian imports are steady, keeping injections intact even as cooling demand builds, Gelber & Associates said Thursday.

Gelber said the combination of steady production and resilient LNG flows around 17.7 Bcf/d continues to counter increased near-term consumption forecasts. NRG echoed that view, noting production has ticked higher and remains at elevated levels, reinforcing a structurally well-supplied market.

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