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NEW YORK: US natural gas futures climbed about 2% to a four-month high on Thursday on expectations utilities injected less gas into storage than usual for this time of year for a fourth week in a row.

Analysts forecast US utilities added 85 billion cubic feet (bcf) of gas into storage during the week ended May 17. That compares with an increase of 97 bcf in the same week last year and a five-year (2019-2023) average rise of 91 bcf for this time of year.

If correct, that build would leave gas stockpiles about 29% above normal for this time of year.

Front-month gas futures for June delivery on the New York Mercantile Exchange rose 6.8 cents, or 2.4%, to $2.910 per million British thermal units (mmBtu) at 9:44 a.m. EDT (1344 GMT), putting the contract on track for its highest close since Jan. 12. That kept the front-month in technically overbought territory for a 15th day in a row for the first time since June 2016.

In other news, power use in Texas was on track to break the record for the month of May for a second time this week on Friday and could top that again over the Memorial Day weekend as homes and businesses crank up their air conditioners to escape a heat wave.

In the spot market, next-day power at the Palo Verde hub in Arizona and South Path-15 (SP-15) in Southern California remained in negative territory for a second day this week.

US next-day power and gas prices have turned negative several times already in 2024, especially in Texas, Arizona and California. Prices at Palo Verde have averaged below zero 16 times so far this year versus just once in the past in 2019. SP-15 prices, which never averaged below zero before this year, have already hit that mark 13 times.

Negative prices signal there is too much power or gas being produced in a region. Energy firms can either reduce output, pay someone to take their power or gas, or, if they can get a permit, flare the unwanted gas.

Financial firm LSEG said gas output in the Lower 48 US states fell to an average of 97.4 billion cubic feet per day (bcfd) so far in May, down from 98.2 bcfd in April. That compares with a monthly record of 105.5 bcfd in December 2023.

On a daily basis, however, output was up about 0.9 bcfd since hitting a 15-week low of 96.2 bcfd on May 1. Energy traders said that increase was a sign that the 63% gain in futures prices over the past three weeks prompted some drillers to start producing more gas.

EQT is the biggest US gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy.

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