NEW YORK: US natural gas futures held steady on Thursday as a smaller-than-average storage build offset forecasts for milder weather and less cooling demand next week.

The US Energy Information Administration said utilities added 61 billion cubic feet (bcf) of gas into storage during the week ended June 16, leaving inventories about 9 percent above-normal for this time of year.

That was a little higher than analysts’ 58-bcf estimate in a Reuters poll but still lower than the 63 bcf increase during the same week a year earlier and the five-year average build of 83 bcf.

After falling on Wednesday to the lowest close since March 7, front-month gas futures on Thursday rose 0.1 cent to settle at $2.894 per million British thermal units. The contract closed at $2.893 on Wednesday.

The front-month contract is 16 percent below a recent high of $3.431 on May 12 due to weeks of stubbornly high inventories, a mild spring and a rise in output.

Tropical Storm Cindy moved inland near the Texas-Louisiana border early Thursday. Offshore gas production in the Gulf of Mexico declined from about 3 billion cubic feet per day earlier in the week to as low as 2.3 bcfd on Wednesday before rising to a forecast 2.4 bcfd on Thursday, according to Reuters data.

Energy analysts, however, noted the cooling rain of the storm would likely have a bigger market impact by reducing demand than the brief cut in production.

US gas consumption was projected to slide to 70.6 bcfd next week from 72.8 bcfd this week as temperatures turn mild and power generators burn less gas to meet air conditioning demand, according to Reuters data.

US production has steadily climbed over the past two months, rising to an average of 71.5 bcfd over the past 30 days compared with 71.1 bcfd during the same period a year ago.

That was still less, however, than the 73.1 bcfd average seen during the same period in 2015, when production was at a record high.

US exports, meanwhile, were expected to average 7.2 bcfd this week, up 29 percent from a year earlier, the data showed.

Meteorologists forecast the weather in July would be slightly warmer than normal, but not quite as hot as last year, prompting power generators to burn a little more gas than usual to meet cooling demand, though less than in 2016. Temperatures in August, however, are expected to be near normal.

Analysts forecast gas inventories will rise by only 1.6 trillion cubic feet (tcf) during the April-October injection season due to relatively low output so far in 2017 and mounting sales abroad.

The build, which is far below the five-year average of 2.1 tcf, would leave storage at just 3.7 tcf at the end of October, well below the year-earlier record of 4.0 tcf and the five-year average of 3.9 tcf.—Reuters