US Natural Gas Prices Slip Ahead of Storage Data

US natural gas prices rose to $3.0/MMBtu, hovering at their highest level in over a week, after EIA data showed a smaller-than-expected increase in inventories. Storage rose by 77 billion cubic feet (Bcf) in the week ended October 30, below forecasts for an 81 Bcf build, bringing total stocks to 3.801 trillion cubic feet. Inventories remained 2.8% below year-earlier levels but 1.4% above the five-year average. Meanwhile, domestic production has weakened, with output in the Lower 48 states averaging 111.2 Bcf per day so far in November, down from 113.4 Bcf in October. However, warmer-than-normal weather is expected to persist through November 20, limiting heating demand. Average gas flows to major US LNG export terminals have also eased to 18.2 Bcf per day, from 18.4 Bcf in October. Nevertheless, global demand for US LNG remains strong amid supply disruptions linked to the war in Ukraine and the US-Israeli conflict with Iran.

US natural gas prices slipped to around $2.94 per MMBtu on Thursday after two consecutive sessions of gains, as traders awaited the latest weekly storage report. Milder weather and subdued demand have allowed energy companies to inject more gas into storage, with analysts expecting inventories to reach 1.4% above normal in the week ended October 30, up from 1.0% in the previous week. Forecasts call for above-average temperatures across much of the country through November 19, likely keeping heating demand subdued over the next few weeks. Meanwhile, LNG export activity has weakened, with average gas flows to the nine major US LNG export terminals falling to 18.1 bcfd so far in November, down from 18.4 bcfd in October. However, declining domestic production helped limit the losses, with output across the Lower 48 states averaging 111.2 bcfd so far this month, down from 113.4 bcfd in October.

US natural gas prices rose to around $2.95/MMBtu on Wednesday, extending gains from the previous session as a decline in output outweighed pressure from forecasts of persistently warm weather and a slowdown in LNG export activity. Producers have scaled back output amid low prices. Meanwhile, above-average temperatures are expected across most of the US through November 18, potentially curbing heating demand. Milder weather and subdued demand have allowed energy companies to inject more gas than usual into storage, with analysts expecting inventories to reach 1.4% above normal in the week ended October 30, up from 1.0% above normal the previous week. In addition, average gas flows to the nine major US LNG export terminals fell to 17.7 bcfd so far in November, down from 18.4 bcfd in October.