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US Natural Gas Update: Futures Sink on Robust Storage, Recover Some Ground on Heat Forecasts

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US natural gas futures pared losses in after-hours trading on Thursday after falling to their lowest level in two months after government data showed a larger-than-expected weekly storage injection, reinforcing expectations that near-term supplies will remain comfortable.

The front-month Henry Hub contract and the continuous contract both fell 1.09% to $2.892 per million British thermal units.

In earlier trade, the August 2026 contract settled 7 cents lower at $2.86/MMBtu, extending its decline over the past month to 40 cents, according to Pinebrook Energy Advisors. Summer 2026 contracts posted a similar decline, while Winter 2026-27 fell 4 cents to settle at $3.53/MMBtu.

"The entire curve finished in negative territory as the market continued to discount near-term weather risk and ample supply," analysts said.

The already bearish sentiment was reinforced after the US Energy Information Administration reported Thursday that working natural gas in storage increased by 41 billion cubic feet in the week ended July 10, above market expectations of about 39 Bcf.

The larger-than-expected storage build pushed front-month prices to an intraday low of $2.823/MMBtu before they pared losses as updated weather forecasts called for hotter conditions across key demand regions, supporting expectations for stronger power demand for air conditioning, Pinebrook Energy Advisors said.

Barchart, citing the Commodity Weather Group, also said forecasts had trended hotter, with above-normal temperatures expected across the Upper Midwest through July 20.

However, supplies remain robust. Barchart, citing BNEF data, said Lower 48 dry gas production increased by 0.8 Bcf per day to a very strong 112 Bcf/d on Thursday, up 3.6% from a year earlier.

Regarding demand, Barchart said total lower 48 gas demand was estimated at 82.8 Bcf/d, down 0.3 Bcf/d from the previous day but up 3.1% from a year earlier.

Celsius Energy estimated July 15 power burn at 49.4 Bcf/d, up 1.9 Bcf/d day over day and 1.7 Bcf/d above the same day last year due to hot weather in the population centers of the Northeast.

On the export side, estimated net LNG feedgas deliveries to US export terminals totaled 17.2 Bcf/d, down 0.6 Bcf/d from the previous day and 8.9% below the prior week, reflecting weaker demand amid maintenance at LNG terminals along the US Gulf Coast.

Aegis Hedging said completion of Transco emergency shutdown work at Sabine Pass should support higher day-over-day feedgas volumes.

Aegis analysts noted that Kinder Morgan (KMI) had received authorization to begin flowing natural gas to the upgraded liquefaction train, bringing the fifth of the terminal's 10 liquefaction trains closer to returning to service.

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