US natural gas futures remain flat as the market awaits guidance from the inventory report

⑴ Natural gas futures for July delivery on the New York Mercantile Exchange rose slightly by 1.1 cents to $3.156 per million British thermal units on Thursday. Trading remained cautious ahead of the weekly inventory report, with prices showing little change.⑵ According to institutional surveys, the inventory increase for the week ending June 12 is estimated at 7.5 billion cubic feet—close to the five-year average increase of 7.3 billion cubic feet for the same period, but lower than last year's increase of 9.7 billion cubic feet.⑶ On the supply side, institutional data shows that since June, the average daily output in the 48 contiguous US states has been 10.94 billion cubic feet, lower than May's 10.97 billion cubic feet and the monthly record high of 11.06 billion cubic feet set in December last year. The marginal decline in output offers some support for prices.⑷ On the demand side, weather forecasts indicate primarily warmer conditions over the next two weeks, which could boost cooling demand and thus increase gas usage for power generation. However, institutions predict that total demand (including exports) in the 48 contiguous states will slip slightly from 10.37 billion cubic feet per day this week to 10.25 billion cubic feet per day next week, lower than previously expected.⑸ This month, demand for LNG export feedstock gas has remained at 1.71 billion cubic feet per day, unchanged from May, mainly impacted by spring maintenance. This figure is still below the record high of 1.88 billion cubic feet per day reached in April.⑹ The remnants of Tropical Storm Arthur are crossing the southeastern United States, causing approximately 236,000 power outages across several states. The storm's path and subsequent developments may disrupt short-term electricity demand and the operation of LNG export facilities. Going forward, attention should be paid to the divergence between actual inventory data and expectations, as well as the continued effects of summer cooling loads on the supply-demand balance.