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After finishing at a seven-week high on Thursday, the benchmark U.S. natural gas prices fell by 2% early on Friday, amid expectations of above-normal temperatures in early October and as November became the front-month contract after the expiry of the October futures contract.
Thursday’s weekly gas storage report from the EIA was slightly on the bearish side, as net injections into storage totaled 90 billion cubic feet per day (Bcf) for the week ending September 22, compared with the five-year average net injections of 84 Bcf and last year’s net injections of 103 Bcf during the same week. Analysts had expected injections at around 88 Bcf for last week.
As of September 22, working natural gas stocks totaled 3,359 Bcf, which is 6% more than the five-year average and 13% more than last year at this time.
Dry natural gas production remained unchanged at an average 101.2 Bcf/d, and average net imports from Canada increased by 2.0% (0.1 Bcf/d) from last week, the EIA said in its natural gas weekly update on Thursday.
For the month of September, LSEG reported a drop in average gas output in the United States, technical analyst James Hyerczyk noted on Friday.
Milder weather ahead could weigh on U.S. natural gas prices in the coming days and weeks. The latest forecasts expect weather in the lower 48 states to remain warmer than normal at least until October 12. Average temperatures are seen at around 73 F (22.8 degrees Celsius) compared to a normal of 69 F for that time of year.
Overall, demand for natural gas in the United States is expected to be low to very low until October 4, according to NatGasWeather.com. The southern U.S. will be warm with highs of 80s to 90s F, while the rest of the U.S. will be nice with highs of 60s to 80s as high pressure rules besides cooler 50s across the unsettled Northwest and North Rockies. National demand is expected to be light in the next 15 days, according to NatGasWeather.com.
