US natural gas futures maintained Wednesday's gains in after-hours trading as hotter-than-expected early-June weather forecasts reinforced expectations for stronger cooling demand and a tighter summer supply-demand balance.
Both the July front-month Henry Hub contract and the continuous contract rose 2.59% to $3.088 per million British thermal units.
The price rise came as updated 6-15 day forecasts trended warmer, encouraging short covering and shifting market attention away from lingering shoulder-season oversupply concerns toward rising summer demand expectations.
"The market is starting to look past shoulder-season looseness toward early summer demand," Gelber & Associates said.
The Commodity Weather Group said above-normal temperatures are expected across the western half of the country during June 1-10.
Aegis Hedging said the warming trend was led by the south-central US, where temperatures across the 15-day outlook increased by 21.6 degrees Fahrenheit. Cooling degree days are expected to soften briefly into the weekend before climbing toward 10 CDDs by the end of the forecast period.
Power-sector consumption reflected stronger cooling-load expectations. Celsius Energy estimated Thursday's power burn at 26.1 Bcf, up 2.6 Bcf from the previous day and 3.1 Bcf above year-ago levels.
Total demand, Barchart said, citing BNEF data, was estimated at 70.1 Bcf/d, up 6.4% from a year ago.
The LNG sector remained steady despite ongoing maintenance work as BNEF data cited by Barchart showed LNG flows to US export terminals at 18.6 Bcf/d on Wednesday, up 200 million cubic feet per day from the prior day and 4.8% higher week on week.
Gelber said dry gas production remains anchored near 110 Bcf/d, while Canadian imports provide a stable secondary supply of near 5 Bcf/d. BNEF data showed Lower-48 dry gas output at 109.8 Bcf/d on Wednesday, down 800 MMcf/d from the previous day but still 1.9% above year-earlier levels.
Attention is now turning to Thursday's US Energy Information Administration storage report. Gelber estimates an injection of 90 Bcf, below the 101 Bcf build recorded in the comparable week last year. It said a smaller-than-year-ago build could reinforce expectations that early summer heat and resilient LNG demand are beginning to tighten balances heading into July.