US natural gas futures traded within a few cents of unchanged on Thursday as the market waits for direction from a federal report expected to show a much bigger than usual weekly storage build.
Analysts said utilities likely added 101 billion cubic feet (bcf) of gas to inventories during the week ended June 21.
That compares with an increase of 71 bcf during the same week last year and a five-year (2014-18) average addition of 70 bcf for the period. It would tie the record seven weeks of consecutive triple-digit injections set in June 2014.
If correct, the increase for the week of June 21 would boost stockpiles to 2.304 tcf, which is 6.8% below the five-year average of 2.472 tcf for this time of year.
On its first day as the front-month, the most active gas futures for August delivery on the New York Mercantile Exchange were up 1.9 cents, or 0.8%, at $2.287 per million British thermal units at 8:05 a.m. EDT (1205 GMT).
That keeps the contract about a dime over the front-month's $2.185 close on June 20, which was its lowest settle since May 27, 2016.
Traders noted the front-month has remained close to multiyear lows since the end of May as near-record production and moderate weather this spring have allowed utilities to inject huge amounts of gas into stockpiles, shrinking a massive storage deficit and removing any lingering concerns of shortages next winter.
The amount of gas in storage has remained below the five-year average since September 2017. It fell as low as 33% below that average in March 2019. Analysts forecast inventories will reach a near-normal 3.7 trillion cubic feet (tcf) by the end of the summer injection season at the end of October.
Output in the Lower 48 US states slipped to 89.80 billion cubic feet per day (bcfd) on Wednesday from a nine-week high of 90.31 bcfd on Tuesday, according to data provider Refinitiv. That compares with an all-time daily high of 90.33 bcfd on April 20 and an average of 81.99 bcfd during this week last year.
With the weather expected to warm for the summer, Refinitiv projected demand in the Lower 48 states would rise to 87.5 bcfd next week from 83.3 bcfd this week as power generators burn more gas to keep air conditioners humming. That is the same as Refinitiv's forecasts on Wednesday.
Those demand estimates include exports, which have been rising in recent weeks as new liquefied natural gas (LNG) export units and the Valley Crossing pipeline from Texas to Mexico entered service.
LNG exports, however, are expected to ease next week after reaching a record high this week of around 6.0 bcfd, according to Refinitiv estimates. Traders said they would not be surprised to see LNG buyers start to reject some US cargoes with gas prices at or near multiyear lows in Europe and Asia. <LNG-AS>
With storage already full in northern Europe, gas at the Title Transfer Facility or TTF in the Netherlands fell to a record low of $3.17 per mmBtu on Thursday, according to Refinitiv data going back to 2005.
The US LNG export terminals with units preparing to enter service include Cheniere Energy Inc's Corpus Christi, Sempra Energy's Cameron in Louisiana, Freeport LNG's Freeport in Texas and Kinder Morgan Inc's Elba in Georgia.
Analysts said those new units will add to the current global LNG glut.