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US Natural Gas Update: Futures Mixed After Bearish Storage Surprise

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US natural gas futures were mixed in after-hours trading on Thursday as a larger-than-expected storage build pressured the front-month price down.

The front-month Henry Hub contract slipped 0.10% to $3.001 per MMBtu, while the continuous contract rose 4.39% to $3.136/MMBtu.

The June contract, set to expire next week, traded between $2.98 and $3.066/MMBtu during the session.

Sentiment weakened after the US Energy Information Administration reported a 101 billion cubic foot injection into Lower 48 storage for the week ending May 15. The build exceeded both the five-year average increase of 92 Bcf and market expectations around 96 Bcf.

Total working gas stocks now stand at 2,391 Bcf, up 33 Bcf, or 6.6%, from a year earlier and 149 Bcf above the five-year seasonal average.

Weather-driven demand also faded after a short-lived East Coast heat event that had previously lifted power burn. Temperatures normalized on Thursday, reducing near-term consumption.

According to Celsius Energy, power burn on Wednesday fell to 34.3 Bcf, down 1.8 Bcf from the prior day but 6.3 Bcf above the same period last year. The firm also reported a seven-day average power burn of 30.6 Bcf/d for May 14-20, up 0.5 Bcf/d year over year.

On the supply side, BNEF data showed Lower-48 dry gas production at 110.4 Bcf/d on Thursday, up 2.4% year over year. Domestic demand came in at 71.2 Bcf/d, essentially flat, up 0.1% annually. Net flows to US LNG export terminals were estimated at 18.4 Bcf/d, rising 4.2% week over week after hitting lows earlier this week due to ongoing scheduled maintenance.

Looking ahead, Barchart, citing data from the Commodity Weather Group, said above-normal temperatures are expected across the western US and Upper Midwest into late May and early June, a factor that could boost medium-term demand.

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