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US Natural Gas Update: Futures Rise Amid In-Line Storage Build, Sliding Output

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US natural gas futures were up on Monday, hitting a seven-week high, following a near-normal storage report last week, along with sliding output and bullish weather forecasts.

Front-month Henry Hub futures and the continuous contract both rose by 1.09% to $3.158 per million British thermal units.

The latest weekly natural gas storage data from the US Energy Information Administration showed a net injection of 85 billion cubic feet for the week ended May 8, broadly in line with market expectations of 86 Bcf, while coming in below the year-ago build of 109 Bcf, according to data compiled by Investing.com.

This was broadly considered a bullish build, which came alongside sliding output, to 106 Bcf per day mid-last week, down from 107.7 Bcf/d the prior week, according to NRG Energy.

US LNG feedgas flows continued to remain under pressure, at 17.85 Bcf according to the Bloomberg LNG Feedgas Model, compared to the 30-day moving average of 18.48 Bcf, largely due to the seasonal maintenance across several key export facilities.

According to Gary Cunningham of Tradition Energy, LNG feedgas flows are unlikely to return to 20 Bcf per day for at least "a couple of weeks," which he noted was bearish for the markets.

Cunningham also noted that the above-normal temperatures expected in the coming weeks should add to cooling gas demand, while power sector gas demand is expected to top 40 Bcf/d to start this week.

Almost the whole country is forecast to see above-normal temperatures from May 25 to May 31, according to the National Weather Service, which is expected to result in higher air conditioner use and, thus, more gas burn in the power sector.

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Weekly US Natural Gas Posts Gains on Warm Weather Forecasts Despite Soft Demand

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Commodities

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