US natural gas futures rebounded in choppy midday trading Thursday after falling on inventory data, following a brief overnight move above $3.
The front-month Henry Hub contract and the continuous contract both traded flat to the previous session's close of $2.956 per million British thermal units.
The US Energy Information Administration reported a 30 billion cubic feet injection into underground storage for the week ended Aug. 28, generally in line with market expectations.
The report appeared to catalyze a sharp price drop immediately after its release, although the magnitude of the decline was difficult to justify based on the storage figure alone, according to Gelber & Associates.
"With the contract unable to hold above the psychologically important $3 threshold, profit-taking and technical selling have likely amplified the move," G&A said.
The latest build was significantly smaller than the 45 Bcf injection reported for the comparable week last year and the 5-year average of 37 Bcf, leaving the underlying storage picture relatively supportive despite the immediate price decline.
US inventories now stand at 3,214 Bcf, or 50 Bcf below year-earlier levels and 160 Bcf above the five-year average, according to the EIA.
Pinebrook Energy Advisors said the 30 Bcf injection marked the third consecutive weekly build to come in below both last year's level and the five-year average for the comparable week.
"As a result, the surplus to the five-year average has declined from 198 Bcf to 160 Bcf, while the deficit to 2025 widened from 12 Bcf as of July 31 to 50 Bcf," Pinebrook said.
Pinebrook attributed the tightening storage balance in part to persistent warmer-than-normal conditions across the South Central US, which led to outsized withdrawals from salt storage. Mountain and Pacific inventories also posted net declines throughout August, the firm said.
Aegis Hedging said weather expectations for the Lower 48 saw little change over the day. Forecasts called for cooler conditions across the Northeast and Midwest in the back half of the outlook, while temperatures in the South Central and West trended warmer.
It said LNG feedgas demand also strengthened, led by gains at Sabine Pass and Golden Pass. Sabine Pass feedgas volumes increased 306 million cubic feet per day to 4.19 Bcf per day, while Golden Pass rose 290 MMcf/d to 566 MMcf/d. LNG feedgas demand remains firm near 19.1 Bcf/d, G&A said.
Meanwhile, natural gas production has recovered to 111.8 Bcf/d, while expanded Permian takeaway capacity is allowing more West Texas supply to reach downstream markets, G&A said.