-- US natural gas futures edged lower in subdued midday trading Friday as storage data largely matched expectations and shoulder-season demand remained weak against a backdrop of ample supply.
The front-month Henry Hub contract, along with the continuous contract, fell 0.56% to $2.66 per million British thermal units.
Earlier in the session, prices touched an eight-month low of $2.63/MMBtu before recovering.
Analysts at Gelber and Associates said the primary driver continues to be fading weather-related demand, with warmer temperatures reducing residential and commercial consumption. Export demand, however, offered some support, with flows to Mexico holding at 7.4 Bcf/d and LNG feedgas near 20.2 Bcf/d.
Production rebounded to 109.3 Bcf/d, while Canadian imports remained steady at 5.1 Bcf/d, bringing total supply to 114.4 Bcf/d and leaving the domestic market well supplied, the firm added.
On Thursday, the US Energy Information Administration reported a 50 billion cubic feet injection into storage for the week ended Apr. 3. The build exceeded the prior week's 36 Bcf injection but fell short of the 57 Bcf added during the same period last year. The figure also came in above market expectations of a 41-Bcf increase, according to data compiled by Investing.com.
Despite the larger-than-expected build, the Energy Buyer's Guide said the report failed to provide fresh directional momentum for prices. It noted that next week's data may show a slightly smaller injection before builds accelerate in subsequent weeks.
"Unless the weather turns less bearish or supply slips again, Henry Hub looks more likely to stay tied to soft spring fundamentals than to break into a broader move higher," Gelber and Associates said.