NEW YORK: US natural gas futures held steady on Thursday after a federal report showed last week’s storage build was smaller than usual, as expected, for a seventh week in a row.
Prices were flat despite a bearish rise in output and forecasts for less demand next week than previously expected even though the heat wave blanketing much of the US will likely remain in place through at least mid-July. That heat wave should force power generators to continue burning lots of gas to keep air conditioners humming.
Traders said recent storage builds have been smaller than usual because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. Higher prices in recent weeks, however, have prompted some producers, including EQT and Chesapeake Energy, to return to the well pad.
The US Energy Information Administration (EIA) said utilities added 52 billion cubic feet (bcf) of gas into storage during the week ended June 21.
That was close to the 51-bcf build analysts forecast in a Reuters poll and compares with an increase of 81 bcf in the same week last year and a five-year (2019-2023) average rise of 85 bcf for this time of year.
Even though storage builds have been smaller than average in recent weeks, the amount of gas in storage was still around 21% higher than usual for this time of year.
On their first day as the front-month, gas futures for August delivery on the New York Mercantile Exchange remained unchanged at $2.747 per million British thermal units (mmBtu) at 10:43 a.m. EDT (1443 GMT).
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