CHICAGO: US natural gas futures held at an 11-week high on Thursday on an expected smaller-than-usual storage build and forecasts for increased demand from power generators this week.
Traders noted prices remained flat despite this week’s export decline, a small output increase and forecasts for milder weather, and lower-than-expected demand for next week.
The US Energy Information Administration (EIA) said US utilities added 75 billion cubic feet (bcf) of gas into storage during the week ended May 7.
That is close to the 74-bcf build analysts forecast in a Reuters poll but lower than a 104 bcf increase in the same week last year and a five-year (2016-2020) average increase of 82 bcf.
That increase boosted stockpiles to 2.029 trillion cubic feet (tcf), or 3.4% below the five-year average of 2.101 tcf for this time of year.
Front-month gas futures rose 0.4 cents to settle at $2.973 per million British thermal units, the highest since Feb. 19 for a second day in a row.
Data provider Refinitiv said gas output in the Lower 48 US states averaged 90.8 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April, but still well below November 2019’s monthly record of 95.4 bcfd.
Refinitiv projected average gas demands, including exports, would fall from 87.3 bcfd this week to 80.8 bcfd next week as the weather turns milder. The forecast for this week was higher due to increased power generator use. Next week’s forecast was lower due to reduced heating use than Refinitiv estimated on Wednesday.
The amount of gas flowing to US LNG export plants averaged 11.2 bcfd so far in May, down from April’s monthly record of 11.5 bcfd.
On a daily basis, US LNG feedgas was on track to drop to 9.9 bcfd on Thursday, its lowest since February when the plants were recovering from the freeze in Texas, according to preliminary data from Refinitiv. The decline was due to reductions at Sabine and Cameron in Louisiana and Freeport in Texas.
US pipeline exports to Mexico averaged 6.0 bcfd so far in May, down from April’s monthly record of 6.1 bcfd, Refinitiv data showed.
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