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US Natural Gas Update: Futures Rise Despite Spike in Output, Steep Decline in LNG Feedgas Flows

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US natural gas futures rose on Wednesday despite a spike in output and falling LNG feedgas flows, which put downward pressure on prices.

The front-month Henry Hub contract and the continuous contract were both up by 0.19% at $3.173 per million British thermal units.

From a fundamentals perspective, US natural gas output is expected to hit 107.5 billion cubic feet per day, slightly above the May average, according to NRG Energy.

Meanwhile, LNG export feedgas flows touched a four-month low on Tuesday, at 16 Bcf, compared to 17.1 Bcf/d in May, according to a Reuters report, citing LSEG data.

On the supply front, the US Energy Information Administration's Weekly Gas Storage Report is expected to show a net injection of 99 Bcf into storage, which falls below the prior year's build of 119 Bcf, and the five-year average for this period at 101 Bcf.

Almost the entire country is expected to see above-normal temperatures from June 10 to June 16, according to the National Weather Service, leading to increased air conditioner use and, in turn, higher power burn demand over the next few weeks.

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