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US Natural Gas Update: Futures Rally Nearly 3% Amid Bullish Near-Term Weather Forecasts

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US natural gas futures rallied on Thursday, reaching their highest level in over a month, as forecasts for several more weeks of hot weather added to the cooling gas demand, ahead of the weekly storage report.

The front-month Henry Hub contract rose 2.60% to $2.916/MMBtu, while the continuous contract gained 2.68% to $2.951/MMBtu.

Above-normal temperatures were expected to blanket almost the entire country, except for parts of the Northwest, from September 03 through September 09, according to the National Weather Service, helping sustain gas demand due to increased air conditioner use.

The markets were also awaiting the US Energy Information Administration's weekly gas storage report on Thursday, for the week ending August 26, with forecasts pointing to a net injection of 19 billion cubic feet, which was above last week's 16 Bcf and 18 Bcf injection the prior year, according to data compiled by Investing.com.

Fundamentally, the market remains well supported, with US dry gas output holding steady at 109 Bcf/d, and LNG export feedgas beginning to inch higher, according to NRG Energy.

Estimates pointed to 19.54 Bcf/d in export feedgas flows on Thursday, the highest level in months, and significantly above the 30-day moving average of 17.88 Bcf/d, according to the Bloomberg LNG Feedgas Model.

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