US natural gas futures lost 1.9 percent on Friday as the amount of gas in storage grows fast over the next few weeks with production expected to remain relatively high and demand low.
Front-month gas futures on the New York Mercantile Exchange closed down 5 cents at $2.634 per million British thermal units.
Some of the most active options were the $1.50 October 2015 puts and the $1.75 August and September puts. August, September and October futures were currently trading in the $2.70s. In early estimates, analysts said utilities added 80 billion cubic feet (bcf) of gas into storage during the week ended April 17, the most on record for that week, according to government data going back to 1994.
That compared with builds of 63 bcf last week, 45 bcf a year earlier and a five-year average increase of 46 bcf.
The US Energy Information Administration will release the storage report at 10:30 a.m. EDT (1430 GMT) on Thursday. Baker Hughes said the number of US gas rigs fell this week by eight to 217, the lowest on record, according to data going back to 1987.
Thomson Reuters Analytics said the latest Global Forecast System weather model for the lower 48 US states shows temperatures remaining near normal over the next two weeks, with 134 heating degree days (HDD).
That compared with a forecast 139 HDDs earlier Friday, 138 HDDs on Thursday and a 30-year norm of 137 HDDs for this time of year. Heating degree days as calculated by Thomson Reuters Analytics are a measure of population-weighted average temperatures.
Consumption was expected to rise to 59.9 billion cubic feet per day on Monday from 55.8 bcfd on Friday. The norm for this time of year is 58.8 bcfd.
Thomson Reuters Analytics forecast production would ease to 72.6 bcfd on Friday from 72.9 bcfd on Thursday. That compared with 68.1 bcfd a year ago and a record high of 74.5 bcfd in December.
Net imports from Canada were expected to hold at 5.4 bcfd, the same as on Thursday, while exports to Mexico were seen rising to 2.4 bcfd from 2.3 bcfd on Thursday.
Imports from US liquefied natural gas terminals were expected to hold at 0.3 bcfd, the same as Thursday, with most gas coming from the Elba Island LNG terminal in Georgia, according to Thomson Reuters Analytics.
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