US natural gas futures were rallying on Wednesday amid bullish weather forecasts and storage figures expected to come in below prior-year levels for the eighth consecutive week.
The front-month Henry Hub contract and the continuous benchmark were both up 2.64% to $3.223 per million British thermal units.
The US Energy Information Administration expects a "slightly warmer summer" from June to September this year, with 3% more cooling degree days compared to the same period last year. While the Summer is set to start cooler than the prior year, temperatures are expected to rise through Q3.
In the near term, however, forecasts have taken a bearish turn, with above-normal temperatures expected only in the southern and easternmost parts of the country from June 17 to June 23, according to the National Weather Service.
Meanwhile, the EIA's weekly natural gas storage report on Thursday is forecast to show a net build of 101 billion cubic feet, below the 109 Bcf net injection during the same period last year, according to data compiled by Investing.com.
This would mark the eighth consecutive week of net injections into storage, falling short of prior-year figures and gradually eroding the prevailing surplus, according to NRG Energy, which is bullish on the markets.
LNG feedgas flows to major LNG export terminals fell to 16.3 Bcf per day so far in June, down from 17.1 Bcf/d in May, as seasonal maintenance at leading facilities continued to weigh on demand.
All things considered, Gary Cunningham of Tradition Energy expects prices to be "range-bound between $3.13 and $3.25" through July, before strengthening through the Winter.