U.S. natural gas futures rose on Thursday as the weather forecasts turned slightly warmer, and as a federal report that was mostly in line with estimates still showed a below-normal storage build.
The U.S. Energy Information Administration (EIA) said U.S. utilities injected 35 billion cubic feet (bcf) of gas into storage in the week ended Aug. 28.
That was in line with analysts estimates in a Reuters poll of an injection of 34 billion cubic feet (bcf), and compared with an increase of 77 bcf during the same week last year and a five-year (2015-19) average build of 66 bcf.
Front-month gas futures rose 3.1 cents, or 1.3%, to $2.517 per million British thermal units (mmBtu) by 11:46 a.m. EDT (1546 GMT). On Wednesday, prices fell to a near one-week low of $2.415 mmBtu.
“It was basically what the market was expecting, but it was still substantially below the five-year average level which is contributing to some of the buying today,” said Daniel Myers, market analyst at Gelber & Associates in Houston.
Hurricane Laura, which landed as a major Category 4 storm near the Texas-Louisiana border last week, had knocked 60% of natural gas offshore production.
“Some of the cooler forecasts in the Midwest are turning a little bit warmer and that’s giving the market a little bit of support,” said Phil Flynn, a senior analyst at Price Futures Group in Chicago.
Refinitiv data indicated 148 cooling degree days (CDDs) in the Lower 48 states over the next two weeks, increasing from 144 CDDs the previous day.
CDDs measure the number of degrees a day’s average temperature is above 65 degrees Fahrenheit (18 degrees Celsius) and are used to estimate demand to cool homes and businesses.
Meanwhile, producers were ramping up output after there was no significant damage to offshore production facilities from the storm.