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US natural gas futures fell over 1 percent on Friday on forecasts for less cooling demand over the next 15 days than previously expected. Front-month gas futures for September delivery on the New York Mercantile Exchange fell 3.6 cents or 1.2 percent to settle at $2.893 per million British thermal units. Prices fell nearly 3 percent for the week.

"A shift in consensus of short-term temperature forecasts away from broad-based warm ideas appears to have emboldened the money managers in adding to their net short holdings," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.

According to a US weather model, while weather is likely to be at near-normal levels over the next couple of weeks, it is seen slightly lower than the hotter weather anticipated earlier this week. Thomson Reuters projected US gas consumption would fall from 78.0 billion cubic feet per day over the next week to 73.7 bcfd in the last week of August as the weather cools and air-conditioning demand falls.

"The core weather forecast is putting a cap on prices, easing any concerns on supply tightening situation. Higher-than-anticipated injection in the week of August 11 is also capping prices," said Phil Flynn, analyst at Price Futures Group in Chicago. Utilities injected 53 billion cubic feet of gas into storage during the week ended August 11, according to the US Energy Information Administration on Thursday. That was above the 47 bcf that analysts forecast in a Reuters poll and compared with an injection of 23 bcf for the same week a year ago and a five-year average addition of 50 bcf.

However, prices rose more than 1 percent on Thursday after touching a more-than-one-week low as the EIA revised its estimates for total inventories in storage at the end of the week of August 4 to 3.029 tcf, compared with the 3.038 tcf reported earlier. US gas production in the lower 48 states increased to an average of 72.7 billion cubic feet per day over the past 30 days from 71.2 bcfd a year earlier. That was still far short of the 73.7 bcfd during the same time in 2015, when output was at a record, Reuters data showed.

The number of rigs drilling for natural gas in the United States rose by 1 this week to 182, data from oil services firm Baker Hughes showed on Friday. Analysts have said utilities probably would stockpile just 1.7 trillion cubic feet of gas during the April-October injection season. Relatively low output, rising sales abroad and higher-than-average cooling demand earlier this summer are limiting the quantities going into storage.

The projected build, which is below the five-year average of 2.1 tcf, would put inventories at 3.8 tcf at the end of October, below the year-earlier record of 4.0 tcf and the five-year average of 3.9 tcf.

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