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US Natural Gas Update: Futures Trade Flat as LNG Demand Offsets Record Production

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US natural gas futures traded flat in midday trading Friday as strong feedgas demand from LNG operators supported prices despite record-high domestic production.

The front-month Henry Hub contract and the continuous contract both rose just 0.34% to $2.911 per million British thermal units.

LNG feedgas demand rose to 19.2 billion cubic feet per day, signaling strong demand, Gelber & Associates said. Weather forecasts also continued to call for above-average temperatures across most of the US through the end of September, supporting late-summer air-conditioning demand.

Cooling degree days, however, are expected to weaken sharply toward month-end as temperatures in the more populous Midwest and Northeast are forecast to fall below normal, Gelber said. Power-sector gas demand, or powerburn, currently stands at 44.7 Bcf/d, Gelber said.

Strong LNG demand is also expected to ease as maintenance at Cameron LNG in Louisiana is set to reduce feedgas consumption to a three-week low of 17.5 Bcf/d, Trading Economics said.

Meanwhile, robust US production continued to weigh on prices. Lower 48 output averaged 113.1 Bcf/d in September, above the record monthly average of 112.2 Bcf/d set in August, according to Trading Economics.

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US Natural Gas Update: Prices Fall as Demand Outlook Weighs on Storage Bullishness

US natural gas prices softened in after-hours trading Thursday as a cooler weather outlook for late September outweighed bullish sentiment from a smaller-than-expected weekly storage build.The front-month Henry Hub contract and the continuous contract each fell 0.76% to $2.869 per million British thermal units.The approach of autumn is weighing on prices as cooling demand is expected to fade beginning next week. Barchart, citing Commodity Weather Group forecasts, said Thursday that the outlook had shifted cooler, with above-average temperatures expected to cover a smaller portion of the South and Southeast from Sept. 22 through Oct. 1.The cooler outlook offset some of the support provided by the Energy Information Administration's weekly storage report. US natural gas inventories rose by 44 billion cubic feet in the week ended Sept. 11, the EIA said Thursday, below analysts' estimates for a build of 48 Bcf to 49 Bcf and well below the five-year average increase of 74 Bcf for the week.The injection was also substantially below the 90 Bcf build recorded during the same week last year.Working gas in storage stood at 3,298 Bcf, down 122 Bcf, or 3.6%, from year-earlier levels but 118 Bcf, or 3.7%, above the five-year average. A week earlier, inventories were 2.7% below year-ago levels and 4.8% above the five-year average.Pinebrook Energy Advisors said storage builds have increased in recent weeks but remain lighter than normal for this time of year, steadily eroding the storage cushion accumulated earlier in the summer.That tightening backdrop has provided underlying support to the market even as power-generation demand begins to ease, the advisory firm said.Late-season heat has limited storage injections by driving demand from the power sector. Despite temperatures remaining above normal, they are trending lower as the season advances, The Wall Street Journal reported, citing Andy Huenefeld of Pinebrook Energy Advisors.Huenefeld said the trend points to stronger storage builds in the coming weeks before more significant heating demand emerges in October.US Lower 48 dry-gas production was 113.2 Bcf/d Thursday, up 5.0% from a year earlier, according to BNEF. Lower 48 gas demand was 77.0 Bcf/d, up 3.8% year over year.Estimated LNG net flows to US export terminals were 18.7 Bcf/d, down 4.1% from the previous week, BNEF data showed.Market sentiment had received a boost Wednesday after the Edison Electric Institute reported that US Lower 48 electricity output in the week ended Sept. 12 rose 16.1% from a year earlier to 94,427 gigawatt-hours.Electricity output over the 52 weeks ended Sept. 12 rose 3.3% year over year to 4,405,549 GWh.