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US Natural Gas Update: Prices Rise on Shrinking Storage Surplus, Cooling Demand Builds

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US natural gas futures extended gains on Friday, supported by a bullish storage report and weather models pointing to rising cooling demand across key consuming regions.

Front-month Henry Hub and the continuous contract both rose 1.43% to $3.331 per million British thermal units.

The upward move leaves the market on track for a monthly gain of over 19%, according to Trading Economics, reversing April's 4.1% decline.

The rally followed Thursday's storage data from the US Energy Information Administration, which showed utilities injected 92 billion cubic feet of gas into storage for the week ended May 22. That was below consensus expectations of 95 Bcf-96 Bcf and also under last year's 104 Bcf build for the same week.

Total inventories rose to 2.483 trillion cubic feet, about 0.9% above year-ago levels and 6.2% above the five-year seasonal average. The surplus versus the five-year norm narrowed to 144 Bcf from 149 Bcf a week earlier, signaling a gradual tightening in balances.

On the demand side, near-term power burn softened. NRG Energy estimated consumption slipped to around 36 Bcf per day and is expected to ease further toward 34 Bcf/d, with weakness across Texas, the Midwest, and the Southeast. However, the outlook points to a rebound into the upper-30 Bcf/d range over the next two weeks as temperatures climb.

Weather forecasts continue to show expanding above-normal heat across the Central US and Midwest into early June, a setup that typically drives higher cooling demand and stronger gas-fired generation.

Data from Celsius Energy showed the seven-day average power burn at 31.9 Bcf/d for the week ended May 27, up 2.9 Bcf/d year over year. Natural gas accounted for 38% of average power consumption, while total electricity use rose 1.1% compared with the same period last year.

Broader consumption trends remain firm. Estimated US gas use in March 2026 reached 2,779 Bcf, or 89.6 Bcf/d, up 1% over the year, EIA said. The electric power sector led gains, increasing gas demand 10.6% to 29.6 Bcf/d.

Supply remains steady but not accelerating. Lower-48 production eased slightly to 109.4 Bcf/d in May from 109.8 Bcf/d in April, according to Trading Economics data. However, preliminary EIA figures show dry gas output still expanding on a year-over-year basis, rising for a 12th straight month in March to 110.9 Bcf/d, up 3.3% from a year earlier.

The EIA reported that the US exported 3.7 times as much natural gas as it imported in March. Imports fell 9.1% to 7.7 Bcf/d, while exports jumped 18.3% to a record 28.7 Bcf/d. LNG shipments rose 25.1% year over year, with exports reaching 18.5 Bcf/d to 34 countries.

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