NEW YORK: US natural gas futures were little changed on Thursday ahead of a weekly gas storage report expected to show a bigger-than-usual build, overshadowing support from forecasts for warmer weather.
Front-month gas futures for July delivery on the New York Mercantile Exchange traded flat at $2.33 per million British thermal units at 9:56 a.m. EDT.
Data provider Refinitiv forecast the number of cooling degree days (CDDs) in the coming two weeks to rise to 167, above the 30-year normal of 149.
CDDs measure the number of degrees a day’s average temperature is above 65 Fahrenheit (18 Celsius) and provide a snapshot into likely demand for cooling.
While weather is likely to be a little warmer across most of the United States, “the injections remain very big for this time of year,” keeping a lid on prices, said Thomas Saal, senior vice president for energy at StoneX Financial Inc.
The US Energy Information Administration (EIA) said utilities added 110 billion cubic feet (bcf) of gas into storage during the week ended May 26, compared with a rise of 82 bcf in the same week last year and a five-year (2018-2022) average increase of 101 bcf.
The EIA’s weekly gas storage report for the week ended June 2 is due at 10:30 am EDT (1430 GMT). “The market is in a more broader sideways pattern and waiting for some weather to show up,” Saal said. Refinitiv estimated natural gas consumption by the US power sector to jump to 38.3 billion cubic feet per day (bcfd) this week from 31.8 bcfd last week, driving overall demand this week to 95.3 bcfd from 90.9 bcfd.
Higher demand from power generators to produce electricity amid rising air conditioning use reduces the fuel available to go into storage for the peak winter heating season. That helps boost prices.
Production, meanwhile, was seen staying largely stagnant at 102.3 bcfd this week from 103 bcfd last week, according to Refinitiv data, before edging up to 102.4 bcfd next week.
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