U.S. natural gas futures fell on Friday, but logged their best week since late April, supported by a report showing a smaller-than-expected storage build.

Front-month gas futures for November delivery on the New York Mercantile Exchange were down 11.8 cents, or 3.4%, to settle at $3.32 per million British thermal units (mmBtu).

However, the contract hit its highest level since July 18 in the previous session and was up more than 17% for the week.

“The weather has been hotter than normal and the lingering heat has caused the storage injections to be subpar given the record productions. We are expecting to see continued hotter temperatures for the next several weeks, which could possibly lead to relatively lower injections but could also extend the injection season for a couple of weeks,” said Zhen Zhu, managing consultant at C.H. Guernsey and Company in Oklahoma City.

The U.S. Energy Information Administration on Thursday said energy firms added 53 billion cubic feet (bcf) of gas into storage during the week ended September 26. That was smaller than the 68 bcf build analysts forecast in a Reuters poll.

“Even though yesterday’s report storage report was lower than expected, we still have healthy storage levels, production’s hanging in there and certainly we’re heading into a lower demand period here in the next few weeks,” said Kyle Cooper,energy market analyst at IAF Advisors.

LSEG said average gas output in the Lower 48 states stood at 106.4 billion cubic feet per day (bcfd) so far in October, down from 107.4 bcfd in September and a record monthly high of 108.3 bcfd in August.

Financial firm LSEG projected average gas demand in the Lower 48 states, including exports, would drop from 101.5 bcfd last week to 98.8 bcfd this week and be at 99.6 bcfd in the next week.

Goldman Sachs has kept its forecast for Henry Hub gas prices unchanged, with November–December delivery contracts seen at $4.00 per million British thermal units (mmBtu) and 2026 prices seen at $4.60 per mmBtu, the bank said in a note on Thursday.

Elsewhere, Shell-led LNG Canada has begun the process of starting up its second 6.5 million tonnes per annum (mtpa) liquefied natural gas processing unit known as Train 2 in Kitimat, British Columbia, a company spokesperson told Reuters on Thursday.
Source: Reuters