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US Natural Gas Update: Futures Rise Nearly 2% on Bullish Storage Build, Drop in Output

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US natural gas futures were up on Friday, after the weekly storage report fell short of forecasts, alongside the continued slide in output.

Both Henry Hub front-month futures and the continuous contract rose by 1.76% to $2.945 per million British thermal units.

The benchmark was set to end the week up by 6.70%, according to data from TradingEconomics.

On Thursday, the US Energy Information Administration reported a net injection of 85 billion cubic feet into storage for the week ended May 8, which was above the prior week's 63 Bcf, but fell marginally short of forecasts at 86 Bcf, according to data compiled by Investing.com.

Natural gas output continued to slide this week, to 106 Bcf per day on Wednesday, down from 107.7 Bcf/d last week, according to NRG Energy.

LNG feedgas flows to export facilities remained low at 17.51 Bcf on Thursday, compared to the 30-day moving average of 18.75 Bcf, according to the Bloomberg LNG Feedgas Model. This was attributed to major LNG export facilities undergoing seasonal maintenance.

Weather forecasts have turned bullish, with most parts of the US expected to see above-normal temperatures from May 22 to May 28, according to the National Weather Service. This is expected to increase gas demand for cooling.

According to Gary Cunningham of Tradition Energy, LNG prices should remain "range bound" and under $3 per MMBtu because there isn't enough fundamental support to keep prices elevated.

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