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US Natural Gas Update: Futures Rise Over 1% Despite Bearish Gas Storage, Amid Warm Weather Forecasts

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US natural gas futures rose on Friday, despite the higher-than-expected injection into storage, as forecasts for hotter weather kept prices elevated.

The front-month Henry Hub contract and the continuous contract were both up 1.36% at $2.764 per million British thermal units.

On Thursday, the US Energy Information Administration reported a 36 billion cubic feet net injection into storage for the week ended Aug. 7, bringing total working gas in storage to 3,153 Bcf.

The net build was ahead of forecasts at 31 Bcf and the prior week's 33 Bcf, but fell short of last year's 49 Bcf, and was broadly in line with the five-year average for this period, at 33 Bcf, according to data compiled by Investing.com.

Weather forecasts turned bullish, with above-normal temperatures expected to blanket almost the whole of the country, barring the Northeast, from August 21 through August 27, according to the National Weather Service, keeping space cooling demand and consequent gas usage elevated.

According to Pinebrook Energy Advisors, the lingering heat across Texas and the Southeast continued to support power-sector demand, while "strong production and healthy inventories remain significant headwinds" for the markets towards the end of peak summer demand.

US LNG export feedgas flows were expected to show a strong recovery, at 18.15 Bcf/d on Friday, above the 30-day moving average of 17.93 Bcf, according to the Bloomberg LNG Feedgas Model.

Demand is expected to see a steep decline on Friday, by 3.2 Bcf/d, largely due to the 3.0 Bcf/d decline in gas usage for power generation while dry gas output remained largely flat at 110.8 Bcf/d, down 0.2 Bcf/d, according to NRG Energy.

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