US natural-gas prices rose into positive territory in after-hours trade on Tuesday amid warmer forecasts, having softened through most of the day, tracking a plunge in crude-oil prices.
The front-month Henry Hub price edged up by 0.40% to $2.793 per million British thermal units, while the continuous contract gained 0.35% to $2.845/MMBtu.
The Energy Buyers' Guide said that with just two trading days left before the expiry of the September contract, which could introduce some additional volatility to the front of the curve, "the broader fundamental backdrop remains relatively soft, and winter pricing continues to carry most of the recent downside momentum as the market approaches the fall shoulder season."
In the near term, the Commodity Weather Group said Tuesday that forecasts had shifted to hotter, with above-average temperatures expected across the Gulf, Midwest and Mid-Atlantic from Aug. 30 through Sept. 8. Beyond the first week of September, temperatures are expected to be milder as the market transitions into the shoulder season.
The warm weather in the southern US is supporting national demand. US demand from the lower-48 states was 77.9 billion cubic feet per day, up 2.8% year over year, according to BNEF. Celsius Energy said powerburn rose to 45.4 Bcf on Monday, up 2 Bcf from Sunday and up 2.5 Bcf from the same day a year ago. It said natural gas made up 45% of the power fuel mix.
On the supply side, U.S. Lower-48 dry-gas production was estimated at 110.9 Bcf/d, up 1.4% from a year earlier, according to BNEF.
Output remains robust despite some recent variability. Bloomberg pegged Lower-48 dry gas production at 110.9 Bcf/d on Tuesday, up 1.4% from the same period last year. Gelber & Associates said production was running at its weakest level in two weeks, while Canadian imports stood at 4.6 Bcf/d, putting total supply at 115.6 Bcf/d.
Government inventory data Thursday is expected show a 22-27 Bcf build for the week ended Aug. 21, Reuters said Tuesday. That would be smaller than the five-year average of 33 Bcf.
Estimated net gas flows to US liquefied natural gas export terminals were 17.4 Bcf/d on Tuesday, down 2.9% from the previous week, according to BNEF. Flows remained below capacity as Golden Pass continued its slow production ramp-up and maintenance at Cheniere Energy's Corpus Christi plant, while Freeport LNG reduced feedgas demand.