US natural gas futures remained essentially flat in after-hours trade on Wednesday as forecasts for hotter weather across much of the country fueled expectations for stronger cooling demand, although any potential gains were capped by prospects for another larger-than-average weekly storage build.
The front-month Henry Hub contract and continuous contract both lost 0.45% to trade at $2.670 per million British thermal units.
The Commodity Weather Group said forecast models turned warmer, with above-normal temperatures expected to persist across the western US through Aug. 14. The hotter outlook is expected to lift electricity demand for air conditioning, supporting natural gas consumption by power generators.
However, the market remained cautious ahead of Thursday's weekly storage report from the US Energy Information Administration. Various analysts' estimates range between a 27 and a 30 billion cubic foot inventory build for the week ended July 31, all exceeding the five-year average build of 23 Bcf for the period.
Natural gas prices also continued to face pressure from Tuesday's announcement by Energy Transfer that the Hugh Brinson pipeline is on track to resume its full transportation capacity of 1.5 Bcf/d by Sept. 1. The expanded capacity will allow additional natural gas to move from the Permian Basin to the Henry Hub benchmark in Erath, Louisiana, further increasing already ample domestic supply.
Barchart, citing BNEF data, said lower-48 US dry gas production averaged 111.4 Bcf/d on Wednesday, up 2.6% from a year earlier. Gas demand across the lower 48 states averaged 81.4 Bcf/d, an 8.4% increase from the same period last year.
Meanwhile, estimated net flows to US LNG export terminals were 18.2 Bcf/d, up 0.3% from the previous week but still below capacity due to weaker liquefaction demand from Freeport LNG, which is undergoing maintenance work expected to wrap up at month-end.