US natural gas prices hovered around $2.91/MMBtu, the highest level in five weeks, supported by a smaller-than-normal storage build and forecasts for persistently warm weather. EIA data showed that energy firms injected 15 Bcf of gas into storage for the week ended August 21, below both market expectations of a 20 Bcf increase and the five-year average build of 33 Bcf for the same period.
Prices also drew support from weather projections, with forecasts calling for record-high temperatures across the Southwest through the weekend. The Commodity Weather Group said on Thursday that above-average temperatures are expected across nearly the entire US from September 1–10, which should keep cooling demand elevated.
Still, robust domestic output is limiting further price gains. Production in the Lower 48 has averaged a record 111.4 bcfd so far in August, up from 110.7 bcfd in July. At the same time, average gas flows to the nine major US LNG export facilities edged down to 17.1 bcfd from 17.2 bcfd in July, although there are early signs that LNG demand is beginning to recover.
