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US Natural Gas Update: Futures Slide Despite Tight Storage Build, Bullish Weather Forecasts

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US natural gas futures were down on Friday, despite tight storage build, rising temperatures, and a rebound in LNG feedgas flows.

The front-month Henry Hub contract and the continuous contract both dropped by 1.83%, to trade at $3.275 per million British thermal units.

US natural gas inventories reported a net injection of 95 billion cubic feet for the week ended May 29, according to the US Energy Information Administration. This marked an uptick from the prior week's 92 Bcf but fell short of consensus estimates of 99 Bcf, according to data compiled by Investing.com.

At the same time, weather forecasts continued to turn bullish, with almost the entire US, except for a tiny sliver of Alaska, expected to see above-normal temperatures from June 12 to June 18, according to the National Weather Service.

LNG feedgas flows, which slipped below 16 Bcf per day earlier this week, have rebounded to 17.21 Bcf/d on Friday, according to estimates by the Bloomberg LNG Feedgas Model. It is, however, still below the 30-day moving average of 17.73 Bcf/d.

According to Gary Cunningham of Tradition Energy, warming weather conditions should support prices as "power sector demands and the low injection put us behind pace to match last year's end-of-season storage."

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