-- US natural gas futures were higher in after-hours trading on Friday, supported by expectations for stronger cooling demand as weather forecasts turned warmer across parts of the country, though rising inventories continued to limit gains.
Both the front-month Henry Hub contract and the continuous contract gained 1.06% to $2.675 per million British thermal units.
Prices found support from forecasts pointing to summer-like conditions later in April. The Commodity Weather Group expects above-average temperatures across the Southeast and Midwest from April 22-26, a shift that could boost cooling demand from power generators, Barchart said. Ahead of that period, NatGasWeather.com projected moderate heating demand as colder air moves into northern regions, with lows in the 20s and 30s Fahrenheit.
Supply-side factors also lent support. US gas output has fallen by roughly 3.2 Bcf/d over the past four days to a 10-week low of 108.0 Bcf/d, with declines concentrated in Louisiana and Ohio, Trading Economics said.
At the same time, it said export demand remained firm. LNG feedgas deliveries averaged 18.9 Bcf/d so far in April, up from 18.6 Bcf/d in March, helping offset softer domestic consumption.
Total demand was estimated at 68.3 Bcf/d on Friday, down 0.6% from a year earlier, Barchart said, citing BNEF data. Within that, industrial demand has dropped 3.9 Bcf/d from a month ago, while gas-fired power generation has eased slightly in line with typical shoulder-season trends, Rystad said.
Prices were briefly volatile earlier in the day amid headlines about the reopening of the Strait of Hormuz. US natural gas futures briefly fell to $2.623/MMBtu before rebounding.
Still, ample inventories capped the upside. The Energy Information Administration reported a 59 Bcf storage build for the week ended Apr. 10, above expectations and well above both last year's increase and the five-year average. The larger-than-expected injection reflected mild weather and subdued heating demand.
"The floor is being supported more by export demand than by domestic weather," Gelber & Associates said. "Unless that cooler risk expands materially, the market still looks like one where any firmness is fighting against loose storage conditions and a forecast that turns more neutral again later in the period."