Elsewhere, benchmark Dutch and British wholesale gas prices edged up amid the impasse in talks for a deal to end the U.S.-Israeli war with Iran and concerns about tighter U.S. sanctions on Tehran.
Supply and demand remain closely watched
Meteorologists forecast mostly warmer-than-normal temperatures through September 3, as Cooling Degree Days rose to 220 on Thursday from 217 on Wednesday. CDDs measure energy demand to cool buildings.
About 40% of U.S. power generation comes from gas-fired plants.
"While the temperature factor is still skewed bullish, we don't look for it to translate to a major reduction in a sizable storage surplus that is likely to see only minor contraction," Ritterbusch added.
Financial group LSEG said average gas output in the U.S. Lower 48 states has reached 111.4 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 from 114.8 bcfd this week to 112.9 bcfd next week. The forecast for next week was lower than LSEG's outlook on Wednesday.
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.
Natural gas futures ease ahead of storage data
U.S. natural gas futures fell on Thursday as traders took profits after prices rose to nearly a four-week high in the previous session, while the market was awaiting a federal weekly storage report due later in the day.
Front-month gas futures for September delivery on the New York Mercantile Exchange fell 5.4 cents, or 1.9%, to $2.76 per million British thermal units. The contract rose to its highest level since July 24 in the previous session.
"This market is seeing downside rotation following yesterday's test of resistance at the $2.87 area per nearby futures," consultancy Ritterbusch & Associates said in a note.
Storage report expected to show modest injection
Investors now await the U.S. Energy Information Administration's weekly gas storage report, which is due at 10:30 a.m. EDT (1430 GMT).
U.S. energy firms likely added a below-normal 19 billion cubic feet of natural gas into storage last week, according to the average estimate in a Reuters poll. The estimate 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.
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