US natural gas futures fell on Thursday for the fourth day in a row, down 11 percent so far this week, on forecasts for mild weather and light heating demand to continue through mid November. That should allow utilities to keep injecting gas into storage caverns that are already at their highest levels for this time of year and will likely soon be at record high levels.
Front-month gas futures for December delivery fell 2.3 cents, or 0.8 percent, to settle at $2.769 per million British thermal units. Since December became the front-month last week, the contract has lost about 11 percent, putting it on track for its biggest weekly loss since January.
The US Energy Information Administration said on Thursday that utilities added 54 billion cubic feet of gas into storage during the week ended on October 28, pushing the total amount of fuel in stock to a record high of 3.963 trillion cubic feet at the end of the injection season.
That injection was roughly in line with analysts' consensus estimate of 56 bcf in a Reuters poll and compared with builds of 73 bcf in the prior week, 58 bcf in the same week a year earlier and a five-year average for that week of 63 bcf. Analysts said the mild weather would allow utilities to keep injecting gas into storage in coming weeks until inventories approach 4.1 tcf in mid November. That would top the all-time high of 4.009 tcf set in November 2015.
Thomson Reuters projected US gas usage would ease to 69.4 billion cubic feet per day this week from 70.0 bcfd last week on forecasts for less heating demand before jumping to 72.3 bcfd next week, when the weather was expected to turn cooler. The power sector is likely to boost its usage of gas, which for most of the industry is now cheaper than coal, to an average of 23.7 bcfd over the next two weeks, up from estimates of 22.7 bcfd earlier in the week, according to Reuters data. Gas supplies were forecast to ease to 77.6 bcfd this week and 77.7 bcfd next week from 78.4 bcfd last week on lower US production and a decline in imports from Canada, Reuters data showed.
US production averaged 69.7 bcfd over the past 30 days, its lowest since 2013. After a warmer-than-normal November, Reuters data forecast the weather would turn colder-than-normal in December before shifting to warmer-than-normal in January and February.