UNG•Elsewhere, Dutch and British gas prices edged higher, touching fresh five-month highs on the lack of progress in negotiations between the U.S. and Iran and as attention turned to Europe's low gas storage levels.
U.S. weekly natgas storage
Global gas benchmark futures ($/mmBtu)
LSEG U.S. GFS two-week weather forecast
LSEG U.S. weekly supply and demand forecasts
U.S. weekly power generation by fuel, week ended Aug. 21
The U.S. Energy Information Administration on Thursday said energy firms added 16 billion cubic feet (bcf) of gas to storage during the week ended August 14.
That figure was lower than the 19-bcf build analysts forecast in a Reuters poll and compares with an injection of 19 bcf during the same week a year ago and an average increase for that week of 29 bcf over the past five years (2021-2025). In the prior week ended August 7, energy firms added 36 bcf of gas into storage.
Record output and mild spring weather this year have allowed energy firms to keep the amount of gas in inventory higher than the five-year (2021-2025) average since March. Gas inventories have remained in surplus despite weeks of above-normal temperatures this summer.
Financial group LSEG said average gas output in the U.S. Lower 48 states has reached 111.5 billion cubic feet per day so far in August, up from a monthly record high of 110.7 bcfd in July.
LSEG projected average gas demand in the Lower 48 states, including exports, would slip slightly from 113.3 bcfd this week to 113.2 bcfd next week. The forecast for next week was higher than LSEG's outlook on Thursday.
Average gas flows to the nine big U.S. LNG export plants stand at 17.2 bcfd so far in August, unchanged from July and slightly lower than a monthly record high of 17.4 bcfd in June.
U.S. natural gas futures rose on Friday and were headed for a second straight weekly gain, supported by forecasts for hotter weather and higher oil prices.
Front-month gas futures for September delivery NGc1 on the New York Mercantile Exchange rose 4.4 cents, or 1.6%, to $2.78 per million British thermal units. The contract was also up 1.6% so far this week.
"We did get some weather model shifts a little bit. We added some cooling degree days, so that's adding a little bit more bullish sentiment... We're not expecting there to be a very large downside to prices unless the weather models shift significantly," said Robert DiDona, president of Energy Ventures Analysis.
Meteorologists forecast mostly warmer-than-normal temperatures through September 4, as Cooling Degree Days rose to 223 on Friday from 220 on Thursday. CDDs measure energy demand to cool buildings.
About 40% of U.S. power generation comes from gas-fired plants.
"This market continues to seesaw in maintaining a consolidation pattern that has been intact for almost 4 weeks. This is beginning to look like an extended base building process that could be setting the stage for a steady counter-seasonal up-move into and through the low demand shoulder period," consultancy Ritterbusch & Associates said in a note.
Additionally, oil prices edged higher and were on track for a second straight weekly gain after the U.S. threatened to impose the toughest sanctions in history with no end in sight for disruptions to Middle East oil flows.
