US natural gas futures on Thursday climbed to a near two-week high, despite a bigger-than-expected storage build, on forecasts for warmer weather and higher air conditioning demand next week. The US Energy Information Administration said utilities added 91 billion cubic feet of gas into storage during the week ended September 8, leaving inventories about 1 percent above normal for this time of year.

That was a little over the 85 bcf build analysts forecast in a Reuters poll, and compared with a 58 bcf increase during the same week a year ago and a five-year average rise of 63 bcf for that period. Front-month gas futures rose 1.2 cents, or 0.4 percent, to settle at $3.070 per million British thermal units. That matches the close on September 1, which was the highest since July 18.

Thomson Reuters trimmed its projections for US gas consumption next week from 72.5 bcfd billion cubic feet per day to 71.3 bcfd. Gas use is seen at 67.8 bcfd this week, primarily because Hurricane Irma reduced power consumption in the US Southeast. About 3.1 million customers, or almost 6.5 million people, were still without power in Florida and Georgia, down from a peak of over 7.8 million customers on Monday, local utilities said.

Irma hit southwestern Florida on the weekend as a Category 4 hurricane, the second most severe on the five-step Saffir-Simpson scale, before weakening to a tropical storm early on Monday. In the past 30 days, US gas production in the lower 48 states rose to an average of 73.1 bcfd from 71.5 bcfd a year earlier. That was still far short of the 74.4 bcfd during the same time in 2015, when output was at a record high, Reuters data showed.

US exports were expected to average 8.4 bcfd this week, up 12 percent from a year earlier now that the Sabine Pass LNG terminal in Louisiana has stepped up deliveries since Hurricane Harvey, according to Reuters data. Utilities probably would stockpile 1.7 trillion cubic feet of gas during the April-October injection season, analysts said. Relatively low output, rising sales abroad and higher-than-average cooling demand earlier this summer have limited the amount of fuel going into storage this year.

The projected build, which is below the five-year average of 2.1 tcf, would put inventories at around 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. Gas prices could spike later this year if inventories remain low and the coming winter is colder than the last two snow seasons, which were among the warmest on record, according to analysts. In their latest forecasts, meteorologists predicted temperatures would be near normal in November and February, warmer than average in December and colder than usual in January.

Copyright Reuters, 2017