US natural gas futures softened further in after-hours trading Wednesday as the market looked ahead to government data expected to show a smaller-than-normal increase in storage inventories.
The front-month Henry Hub contract and the continuous contract each fell 0.92% to $2.892 per million British thermal units.
Analysts polled by The Wall Street Journal expect the US Energy Information Administration to report a 48 billion cubic feet increase in natural gas inventories for the week ended Sept. 11, well below the five-year average build of 74 Bcf for the same week.
As of Sept. 4, US natural gas inventories were 2.7% below year-earlier levels but 4.8% above the five-year seasonal average, indicating that overall supplies remained adequate.
On the fundamentals side, warmer-than-normal temperatures are helping keep power burn elevated, while record domestic production continues, Pinebrook Energy Advisors said.
Barchart, citing data from The Commodity Weather Group, said Wednesday that above-average temperatures are expected across the South and Southeast through Sept. 25. The warm late-summer temperatures are expected to support demand for natural gas from power generators as air-conditioning use continues into early autumn.
Celsius Energy data showed a 0.9 Bcf increase in powerburn on Tuesday, putting Sept. 15 powerburn at 42.9 Bcf. For the week ended Tuesday, powerburn averaged 43.7 Bcf/d, up 4.8 Bcf/d from the same week a year earlier.
Total US natural gas demand on Wednesday was pegged at 76.3 Bcf/d, up 2.4% year over year, Barchart said, citing BNEF data.
On the supply side, US Lower 48 dry gas production remained strong at 112.3 Bcf/d on Wednesday, up 4.0% from a year earlier, Barchart said.
Estimated net gas flows to US liquefied natural gas export terminals were 18.5 Bcf/d on Wednesday, down 4.7% from the previous week.
"LNG exports remain near 19 Bcf per day and are poised to show another leg of growth before the end of the year," Pinebrook Energy said.