-- US natural gas futures turned higher Thursday after a smaller-than-expected storage build eased some near-term supply pressure, with weather-driven demand expectations adding support.
Both the front-month Henry Hub futures and the continuous contract rose 1.50% to $2.771 per million British thermal units.
Prices traded lower earlier in the session but jumped immediately after the weekly storage report, reaching an intraday high of $2.813/MMBtu.
The US Energy Information Administration reported that working gas in underground storage increased by 63 billion cubic feet for the week. That came in below expectations, which had centered on a build of 72 to 80 Bcf.
Even with the smaller injection, inventories remain elevated at 2,205 Bcf. That is 75 Bcf above year-ago levels and 139 Bcf above the five-year average of 2,066 Bcf. The surplus versus the seasonal norm, however, narrowed from 153 Bcf the prior week.
Weather forecasts helped reinforce the move higher. Cooler-than-normal systems are expected to persist across the Midwest and Northeast through Friday, supporting late-season heating demand. At the same time, hotter conditions are building in the West and Florida, with highs forecast to reach the 90s and even triple digits in early May, lifting cooling demand.
Looking further out, outlooks for the next 6-15 days point to a warming trend spreading across the Plains and into the eastern US, according to forecasts cited by NRG Energy.
On the supply side, US dry gas production slipped by 0.9 billion cubic feet per day to 106 Bcf/d. Demand also weakened, falling by 1.3 Bcf/d to 78.9 Bcf/d, largely due to reduced power sector consumption, NRG said.
Liquefied natural gas export feedgas rose modestly by 0.3 Bcf/d to 17.2 Bcf/d. However, volumes remain below April highs as seasonal maintenance continues, partially offset by incremental demand tied to ramp-up activity at Golden Pass.