-- US natural gas futures fell sharply in midday trading on Friday as bearish storage data and easing geopolitical risk sentiment outweighed lingering supply tightness.
The front-month Henry Hub contract and the continuous contract both declined 3.21% to $2.53 per million British thermal units.
Futures prices weakened further earlier in the day, dropping as low as $2.495/MMBtu, the lowest level since at least October 2024, an 18-month low.
Prices have been under sustained pressure, with losses of 11.81% over the past four weeks and 17.53% over the past year, according to Trading Economics.
The latest US Energy Information Administration report reinforced the bearish tone on Thursday, showing a storage injection of 103 billion cubic feet for the week ending Apr. 17. That beat expectations and exceeded both last year's comparable build of 77 Bcf and the five-year average injection of 64 Bcf. Total inventories now sit about 7.1% above seasonal norms.
Demand remains muted as mild spring temperatures suppress heating consumption. Weather forecasts point to mostly near-normal conditions through early May, offering little support for near-term demand recovery.
On the supply side, US production has eased, falling roughly 3.8 billion cubic feet per day over the past 17 days to an 11-week low of 108.3 Bcf/d. LNG feedgas demand, however, remains strong, rising to 18.9 Bcf/d in April and tracking toward a potential monthly record.
NRG Energy data should output at 106.4 Bcf, below year-ago levels, while LNG feedgas flows were reported at 18.7 Bcf/d.
Geopolitical risk premiums provided limited support earlier in the week due to tensions in the Middle East, but that bid faded somewhat on Friday. Reports of diplomatic engagement between Iran and the US, including planned talks involving negotiators in Islamabad focused on the Strait of Hormuz situation, reduced fears of immediate supply disruption.