Natural gas futures held near four-month highs on Friday, driven by a bullish weekly storage report from the U.S. Energy Information Administration (EIA) released Thursday. The EIA reported a 95 billion cubic feet (Bcf) injection into storage for the week ending May 29. This was significantly below the consensus forecast, which anticipated a build of around 101 Bcf, and also less than the five-year average increase of 101 Bcf.
The smaller-than-expected build signals a tighter supply-demand balance than the market was pricing in, causing prices to rally. The report narrowed the storage surplus compared to the five-year average and put inventories slightly below levels seen at the same time last year. The price strength is further supported by forecasts for early-season heat across the U.S., which is expected to boost cooling demand, and continued strong demand for U.S. LNG exports amid geopolitical tensions in the Middle East.