-- US natural gas futures moved lower in midday Tuesday trade as subdued demand and still-ample supply fueled expectations for another sizeable storage build.
Both the front-month Henry Hub natural gas contract and the continuous contract fell 1.87% to $2.58 per million British thermal units.
Early estimates for this week's storage report from the US Energy Information Administration, due on Thursday, point to an injection of 50 billion cubic feet to 62 Bcf, according to Liquidity Energy. That compares with a 22 Bcf build in the same week last year and a five-year average increase of 38 Bcf.
It said inventories have risen sharply in recent weeks, pushing the surplus versus the five-year average above 100 Bcf. It cited one market observer who expects the overhang to exceed 150 Bcf by the end of April. As of Apr. 3, the surplus stood at 87 Bcf.
Milder weather has weighed on consumption, with heating demand running about 15% below normal. Lower 48 gas demand for power generation declined 4% last week, according to Liquidity Energy, citing Natural Gas Intelligence.
NRG said its data showed total US consumption fell from about 115 Bcf per day last Tuesday to about 95 Bcf/d, a year-over-year decline of 3.1 Bcf/d. Aegis noted that residential and commercial demand slipped by 0.7 Bcf/d, though stronger power burn, up 1.4 Bcf/d to 34.8 Bcf/d, offset the decline.
On the supply side, output has eased but remains elevated. Aegis Hedging said US production was down roughly 2 Bcf/d as of Tuesday morning, with Texas volumes falling by about 1 Bcf/d, reversing gains from late last week and dropping to a two-week low.
NRG Energy said total US gas output has averaged 107.2 Bcf/d in recent days, below earlier highs but still 1.7 Bcf/d above year-ago levels.
Flows to liquefied natural gas export terminals remained steady. Liquidity Energy said feedgas deliveries to the nine largest US LNG facilities averaged 18.9 Bcf/d in April, near capacity and slightly higher than March levels.