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US Natural Gas Update: Futures Rise After Storage Build Misses Estimates

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US natural gas futures climbed after government data showed a storage build slightly below expectations, trimming the surplus versus seasonal norms.

Front-month Henry Hub futures and the continuous contract both rose 5.69% to $3.271 per million British thermal units.

According to the US Energy Information Administration, working gas in storage rose by 92 billion cubic feet for the week ended May 22, bringing total inventories to 2,483 Bcf. The build came in just under analyst expectations of 93-98 Bcf and below the 104 Bcf injection recorded a year earlier.

The latest data leaves stocks 6.2% above the five-year historical average, down slightly from a 149 Bcf surplus the prior week to 144 Bcf. Year-on-year inventories now sit roughly 0.9% higher.

NatGasWeather.com forecasts a modest storage build of at least 87 Bcf for next week, citing record heat across the US East last week, offset by cooler-than-normal conditions in the Northwest, Mountain West, and Plains.

For the coming week, it expects overall weak national demand as systems bring showers, thunderstorms, and largely seasonal temperatures in the 60s-80s, with pockets of 90s and 50s.

On the demand side, NRG Energy data showed a 2.5 Bcf per day drop in power sector consumption, only partially offset by a 1.3 Bcf/d rise in residential and commercial demand. Total US gas demand is expected to decline by 0.8 Bcf/d, even as LNG feedgas edges up 0.2 Bcf/d.

It said dry gas production has also increased by 0.6 Bcf/d, hovering just below 108 Bcf/d over the past week, adding to near-term supply pressure.

Geopolitical risk premiums also eased following an Axios report that US and Iranian negotiators have tentatively agreed to a 60-day memorandum of understanding to extend a ceasefire framework and reopen talks on Iran's nuclear program, pending US presidential approval.

The draft reportedly includes provisions to keep shipping through the Strait of Hormuz open, reduce maritime disruptions, and gradually ease sanctions-related restrictions on limited Iranian oil exports.

A restoration of flows would ease global LNG logistics constraints and could soften European gas prices ahead of the winter storage cycle, where inventories remain structurally tight.

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