US natural gas futures rose in midday trading on Thursday, supported by renewed geopolitical uncertainty after reported setbacks in US-Iran negotiations and a larger-than-expected weekly storage build reported by the US Energy Information Administration.
The front-month Henry Hub contract gained 0.57% to trade at $3.021 per million British thermal units, while the continuous contract climbed 4.69% to $3.145/MMBtu.
EIA reported that domestic natural gas inventories increased by 101 billion cubic feet for the week ended May 15, bringing total stocks to 2,391 Bcf.
The build exceeded expectations, clustering around 95-98 Bcf, and left inventories 33 Bcf above year-ago levels and 149 Bcf above the five-year average of 2,242 Bcf, while remaining within the seasonal historical range.
Earlier in the session, prices firmed on geopolitical headlines after Iran's Supreme Leader reportedly ordered the Islamic Revolutionary Guard Corps to retain uranium reserves and threatened potential attacks on energy infrastructure in Gulf Cooperation Council countries, adding a risk premium to the market.
Weather fundamentals, however, continued to limit upside. Forecast models from NatGasWeather.com indicated Low to Moderate demand over the next three days, then shifting to Low to Very Low demand thereafter, reflecting mild conditions across much of the US.
NRG Energy noted a more mixed near-term demand picture, with total US consumption rising roughly 1 Bcf per day. Gains in residential/commercial, industrial, and LNG feedgas demand offset a 2.7 Bcf/d decline in power burn.
Looking ahead, NRG said residential and commercial demand is expected to rise by about 2.4 Bcf/d, while LNG feedgas could recover above 17 Bcf/d, compared with a recent monthly average of 16.9 Bcf/d, as seasonal maintenance continues to constrain flows.
On the LNG pricing side, Kpler said Japan's import costs are likely to rise sharply into the third quarter as higher crude prices feed through oil-linked contracts with a typical three-to-five-month lag. Kpler projected Japan's LNG import costs would rise from about $10.74/MMBtu in March to roughly $17.50/MMBtu in July.
The firm added that firmer Asian spot LNG prices, tighter US fundamentals, and ongoing shipping disruptions are also contributing to higher delivered costs, underscoring how Japan's contract-heavy procurement structure delays but does not prevent exposure to global price volatility.