US natural gas futures edged higher in midday trading on Wednesday after prices earlier fell to their lowest level in three months, with traders weighing improving demand fundamentals against ongoing export-related headwinds.
Both the front-month Henry Hub contract and the continuous contract rose 1.15% to $2.732 per million British thermal units.
Natural gas futures appeared to find a floor Wednesday morning after four consecutive losing sessions, according to Natural Gas Intelligence. Prices fell as low as $2.666/MMBtu in early trading before recovering.
Market fundamentals remained broadly supportive. NRG Energy said US natural gas demand was running at 111.7 billion cubic feet per day, down slightly from the previous day but still above year-ago levels.
The decline was largely driven by a 2.9 Bcf/d reduction in power-sector demand as cooling needs eased across the Southeast and Northeast, although above-normal temperatures are expected to continue into early August.
Natural gas production slipped 0.5 Bcf/d to 107.9 Bcf/d, though July output has averaged 107.6 Bcf/d, slightly above the 107.4 Bcf/d average recorded in July last year.
LNG feedgas demand remained firm near 17.1 Bcf/d, but maintenance at Freeport LNG continues to weigh modestly on demand, providing a slight bearish factor within an otherwise constructive demand environment.
Attention now turns to the Energy Information Administration's weekly storage report due Thursday. Investing.com said analysts are forecasting a 34 Bcf injection for the week ended July 24.
If confirmed, inventories would rise to a level 191 Bcf above the five-year average while remaining 26 Bcf below year-ago levels.