-- US natural gas futures declined further in midday trading on Thursday, pressured by soft supply-demand fundamentals and news that Israel aims to start peace talks with Lebanon.
The front-month Henry Hub contract, along with the continuous contract, fell 1.76% to $2.68 per million British thermal units.
The US price dropped in line with European prices following media reports that Israel is seeking direct negotiations with Lebanon.
That news followed a bearish report that US inventories grew by more than was expected. The US Energy Information Administration reported a larger-than-anticipated 50 billion cubic feet rise in underground gas storage for the week ending Apr. 3, bringing total inventories to 1,911 Bcf.
Stocks are now 89 Bcf higher than a year ago and 87 Bcf above the five-year average of 1,824 Bcf. Analysts expected a build of about 40-44 Bcf.
NRG Energy said domestic demand declined sharply, with residential and commercial consumption dropping 7.2 Bcf per day amid shoulder-season conditions.
Power burn eased slightly and industrial demand fell modestly, reducing total US gas demand by roughly 9 Bcf/d from Wednesday. LNG feedgas remained flat at 19.1 Bcf/d.
Production fell slightly to about 106.3 Bcf/d, down 0.7 Bcf from the previous day. NRG said that while production has dipped modestly, weaker seasonal demand and steady LNG flows continue to support looser market balances, adding "near-term price action [is] being driven more by macro headlines than by incremental shifts in gas fundamentals."