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US Natural Gas Update: Futures Rally Ahead of Gas Storage Data, Bullish Weather Forecasts

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US natural gas futures rallied on Thursday, ahead of the weekly gas storage data, with weather forecasts pointing to above-average near-term temperatures.

Both the Henry Hub front-month contract and the continuous futures benchmark were up 1.96% at $3.284 per million British thermal units.

The US Energy Information Administration is set to release its Weekly Natural Gas Storage Supplement later in the day, with forecasts expecting a net injection of 67 billion cubic feet, which falls short of the prior week, prior year, and the five-year average for this period, at 73 Bcf, 96 Bcf, and 75 Bcf, respectively, according to data compiled by Investing.com.

This makes it a bullish build, signaling tighter supplies and resulting in a lower average surplus for the period, with the Energy Buyer's Guide noting that "the market could see a break to the upside," if there isn't sufficient cushioning in inventories.

Meanwhile, more than two-thirds of the country is expected to see above-normal temperatures from July 02 to July 08, according to the National Weather Service, adding to air conditioning and thus, gas-fired power demand.

LNG export feedgas flows are adding to the bullish momentum, with flows estimated at 19.02 Bcf/d on Thursday, compared to the 30-day moving average of 18.19 Bcf, according to the Bloomberg LNG Feedgas Model.

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