U.S. natural gas prices hit over 2-week high on smaller storage build, strong LNG exports

• S. Energy Information Administration (EIA) reports 18 Bft³ injection vs. 26 Bft³ forecast
• LNG exports rise, average 15.9 Bft³d in August
• Cooling degree days (CDDs) projected at 128 over two weeks, prior 155 estimate

U.S. natural gas futures climbed to a more than two-week high on Thursday after a U.S. report showed a smaller-than-expected storage build and on strong liquefied natural gas exports.

Front-month gas futures for October delivery on the New York Mercantile Exchange rose 5.8 cents, or 2%, to settle at $2.94 per million British thermal units. Prices extended gains for a third straight session to their highest since August 11.

The EIA said energy firms added 18 Bft³ of gas into storage during the week ended August 22. That was smaller than the 26-Bft³ build analysts forecast in a poll and compares with an increase of 35 Bft³ during the same week a year ago and a five-year (2020–2024) average build of 38 Bft³ for this time of year.

"It has to do with the storage report number we just observed - it was a little tighter than estimates, which has sparked some short-covering. Despite weaker demand from declining cooling degree days, storage injections have been smaller than expected since last week, suggesting production is being overestimated," said Robert DiDona, president of Energy Ventures Analysis.

Financial firm LSEG estimated 128 cooling degree days over the next two weeks, lower than the 155 CDDs estimated on Wednesday. The norm for this time of year is 130 CDDs. CDDs, which are used to estimate demand to cool homes and businesses, measure the number of degrees a day's average temperature is above 65°F (18°C).

LSEG projected average gas demand in the Lower 48 states, including exports, would ease from 111.1 Bft³d this week to 107.3 Bft³d next week and 104.2 Bft³d in two weeks. The forecasts for this week and next were similar to LSEG's outlook on Wednesday.

"Between summer cooling and winter heating, the fall shoulder season brings maintenance across pipelines, production, power plants, and LNG facilities, which could drive volatility. The key factor will be whether storage injections increase significantly or hold below expectations, keeping inventories under 3.9 Tft³ by the end of October," DiDona said.

LSEG said average gas output in the Lower 48 states had risen to 108.5 Bft³d in August, up from a record monthly high of 107.8 Bft³d in July.

The average amount of gas flowing to the eight big U.S. LNG export plants has risen to 15.9 Bft³d in August, up from 15.6 Bft³d in July. That compares with a record monthly high of 16.0 Bft³d in April.

In the tropics, the U.S. National Hurricane Center reported no disturbances in the Atlantic, while Tropical Storm Fernand, which formed south-southeast of Bermuda on Saturday, transitioned into a post-tropical system on Thursday.

According to the average estimate of analysts in a Reuters poll, U.S. energy firms likely added a below-normal 26 Bft³ of natural gas into storage last week. That compares with an increase of 35 Bft³ during the same week a year ago and a five-year (2020–2024) average build of 38 Bft³ for this time of year. In the prior week ended August 15, utilities added 13 Bft³ of gas into storage.

Meanwhile, EQT Corp. is in talks to secure LNG supplies from NextDecade's export terminal under construction in Texas, Bloomberg News reported on Wednesday, citing sources.

Commercial activity in the U.S. LNG sector has picked up rapidly since President Donald Trump lifted a moratorium on new export permits shortly after taking office in January.

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