US natgas futures rise ahead of storage report with colder weather coming

• The decrease would cut stockpiles to 3.515 trillion cubic feet (tcf), 0.5pc  below the five-year average of 3.532 tcf for this time of year.
• Gas production in the Lower 48 states fell to a five-week low of 94.3 billion cubic feet per day (bcfd) on Wednesday due to declines in several states.
• Gas flows to liquefied natural gas (LNG) export plants slipped to 7.9 bcfd on Wednesday from 8.1 bcfd on Tuesday.

US natural gas futures edged up on Thursday ahead of a federal report expected to show a slightly bigger than usual weekly storage build as a decline in production and forecasts confirming a cold snap will blanket much of the country in mid- to late-December.

Analysts said utilities likely pulled 76 billion cubic feet (bcf) of gas from storage during the week ended Dec. 6.

That compares with a withdrawal of 75 bcf during the same week last year and a five-year (2014-18) average decline of 68 bcf.

If correct, the decrease would cut stockpiles to 3.515 trillion cubic feet (tcf), 0.5pc  below the five-year average of 3.532 tcf for this time of year.

The US Energy Information Administration will release its weekly storage report at 10:30 a.m. EST (1530 GMT) on Thursday.

Front-month gas futures for January delivery on the New York Mercantile Exchange were up 3.7 cents, or 1.7pc , to $2.280 per million British thermal units at 7:40 a.m. EST. On Wednesday, the contract settled about one cent over its close on Dec. 9, which was the lowest settle since Oct. 11.

Analysts said stocks would likely return to a surplus over the five-year average during the next month or so as rising production enables utilities to leave more gas in storage.

Gas production in the Lower 48 states fell to a five-week low of 94.3 billion cubic feet per day (bcfd) on Wednesday due to declines in several states, down from 94.8 bcfd on Tuesday, according to Refinitiv.

That compares with an average of 95.4 bcfd last week and a record high of 96.3 bcfd on Nov. 30.

Meteorologists projected temperatures in the US Lower 48 states will turn from warmer than normal now to colder from Dec. 16-23 before turning warmer again from Dec. 24-27. That is similar to Wednesday's forecasts.

With cooler weather coming, data provider Refinitiv projected demand in the Lower 48 states, including exports, would rise to an average of 127.6 bcfd next week from 117.9 bcfd this week.

That is a little lower than Refinitiv's forecasts on Wednesday of 128.2 bcfd for next week and 117.9 bcfd for this week.

Gas flows to liquefied natural gas (LNG) export plants slipped to 7.9 bcfd on Wednesday from 8.1 bcfd on Tuesday, according to Refinitiv data.

That compares with an average of 7.6 bcfd last week and an all-time high of 8.2 bcfd on Dec. 8 with the ramp up of new liquefaction trains at Freeport LNG's plant in Texas and Cameron LNG's plant in Louisiana.

Separately, traders said Kinder Morgan Inc's Elba Island LNG export plant in Georgia could send out its first cargo this week.

Pipeline flows to Mexico, meanwhile, rose to 5.8 bcfd on Wednesday from 5.5 bcfd on Tuesday, according to Refinitiv data.

That compares with an average of 5.3 bcfd last week and an all-time daily high of 6.2 bcfd on Sept. 18.