US natural gas futures unchanged on steady, warm forecasts

US natural gas futures traded within a few cents of unchanged on Monday on forecasts for steady above-normal cooling demand over the next two weeks. Front-month gas futures were down 1.9 cents, or 0.6 percent, at $2.940 per million British thermal units at 9:26 am EDT (1326 GMT). Thomson Reuters projected US gas consumption would jump to 74.5 billion cubic feet per day this week as air conditioning demand rises from 72.8 bcfd last week before easing to 69.9 bcfd next week when the weather is expected to turn more mild.
Traders noted this was usually the time of year that heating demand starts to top cooling demand. The continuing heat expected this week boosted next-day power prices at the PJM West Hub in western Pennsylvania to their highest since July 2015. Production in the lower 48 US states rose to an average 73.7 bcfd over the past 30 days, up from 71.1 bcfd a year earlier. That was still far short of the 74.3 bcfd during the same period in 2015, when output was at a record high, Reuters data showed.
US exports were expected to average 8.4 bcfd this week, up 53 percent from a year earlier due primarily to higher liquefied natural gas exports, according to Reuters data. After adding more gas to storage than usual over the past three weeks, analysts said utilities likely added a smaller-than-normal 69 billion cubic feet of gas into storage during the week ended September 22. That compared with a 49 bcf increase the same week a year ago and a five-year average rise of 84 bcf for that period. If correct, the build would leave inventories about 2 percent above the five-year average for this time of year.
Even though stocks were near normal for this time of year, utilities were expected to add just 1.7 trillion cubic feet of gas during the April-October injection season because of relatively low output earlier this year and rising sales abroad, analysts said. The projected build, which is less than the five-year average of 2.1 tcf, would leave inventories at around 3.8 tcf at the end of October, below the year-earlier record of 4.0 tcf and the five-year average of 3.9 tcf.