U.S. natural gas futures rise as traders brace for storage report

(Reuters) - U.S. natural gas futures rose in the run up to a federal report expected to show a smaller than usual storage build last week as hotter weather boosted cooling demand.

Front-month gas futures for September delivery on the New York Mercantile Exchange were up 6.5 cents, or 2.5%, at $2.66 per million British thermal units (mmBtu) at 09:53 a.m. EDT (13:53 GMT).

Analysts forecast U.S. utilities added 34 billion cubic feet (bcf) of gas into storage during the week ended Aug. 11. That compares with an increase of 21 bcf in the same week last year and a five-year (2018-2022) average increase of 41 bcf.

If correct, last week's increase would lift stockpiles to 3.064 trillion cubic feet (tcf), or 10.8% above the five-year average of 2.766 tcf for the time of year.

Despite some expected cooling across much of the northeast region and heat moderation across Texas and surrounding regions, "the temperature factor still appears conducive toward storage surplus contraction," analysts at Ritterbusch and Associates said in a note.

Data provider Refinitiv forecast U.S. gas demand, including exports, would be little changed from 103.7 billion cubic feet per day (bcfd) this week to 103.8 bcfd next week. These numbers were significantly lower than Wednesday's forecast.

Refinitiv said average gas output in the Lower 48 states was 101.7 bcfd so far in August, nearly the same as the 101.8 bcfd in July, and not far from a monthly record of 102.2 bcfd in May.

Gas flows to the seven big U.S. LNG export plants have fallen from an average of 12.7 bcfd in July to 12.3 bcfd so far in August, mainly due to reductions at Venture Global LNG's Calcasieu facility in Louisiana. That compares with a monthly record of 14.0 bcfd in April.

The U.S. is on track to become the world's biggest LNG supplier in 2023 - ahead of recent leaders Australia and Qatar – as higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to the war in Ukraine.

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