US natural gas futures advanced in midday trading Friday after a smaller-than-expected storage build and continued signs of easing production, reinforcing a tighter near-term supply backdrop.
Henry Hub front-month futures and the continuous contract both rose 2.38% to $2.963 per million British thermal units.
The upward move followed Thursday's report from the US Energy Information Administration, which showed an 85 billion cubic foot injection into storage for the week ended May 8. The build fell short of analyst expectations and was well below the 109 Bcf increase recorded in the same week a year earlier.
The latest data left the storage surplus versus the five-year average at 6.5%, while the surplus over the year arrowed to 2.3%, the EIA said.
Demand trends were mixed. Power sector consumption declined by 1.2 Bcf per day Thursday and is expected to fall by another 0.7 Bcf/d Friday, according to NRG Energy. Residential and commercial demand provided a partial offset on Thursday with a 0.6 Bcf/d increase, though that segment is forecast to drop by 1.3 Bcf/d on Friday.
On the power pricing front, wholesale electricity prices in the PJM Interconnection grid region reached $136.53 per megawatt-hour in Q1 2026, nearly double the $77.78/MWh recorded in the same period last year, NRG said. The increase has been attributed largely to rising load from data centers.
Aegis Hedging said Friday that rising power prices are expected to improve margins for gas-fired generation, reinforcing gas demand as the system adjusts to higher structural electricity load growth from data center expansion.
Hotter temperatures on the US East coast could bring some elevated power demands and some hourly price volatility to NYC electricity markets next week, Tradition Energy's Gary Cunningham said in a Friday note.
The "heat shouldn't be enough to create any real strain on the grid, and the price volatility from PJM to New England will likely be capped at ~$150/MWh," Cunningham said.
US dry gas production slipped from about 107.7 Bcf/d over the weekend to 106.0 Bcf/d midweek before rebounding toward 107.2 Bcf/d Friday, according to NRG.
LNG feedgas deliveries declined from a record 18.8 Bcf/d in April to around 17.0 Bcf/d so far in May, hitting a 15-week low amid seasonal maintenance at facilities including Golden Pass LNG and Freeport LNG, NRG said.
In project development news, Caturus announced a final investment decision on its $13 billion Commonwealth LNG project in Cameron Parish, Louisiana. The company also secured $9.75 billion in financing for the 9.5 million tonnes per annum export terminal, which is scheduled to enter service in 2030.