US natural gas prices dip as storage build rises and profit-taking weighs

US natural gas futures slipped on Thursday after government data showed a slightly bigger-than-expected storage build, triggering some profit-taking as traders reacted to the steady pace of injections.

Front-month gas futures for August delivery on the New York Mercantile Exchange (NYMEX) traded 6.7 cents, or 1.9 per cent lower, at $3.42 per million British thermal units by 11:33 EDT (15:33 GMT). Prices had gained as much as 2.5 per cent earlier in the session.

The US Energy Information Administration (EIA) said energy firms added 55 billion cubic feet (bcf) of gas into storage during the week ended June 27, marking the 11th week in a row injecting more gas into storage.

That was slightly higher than the 53-bcf build analysts forecast in a Reuters poll and compares with an increase of 35 bcf during the same week last year and an average increase of 61 bcf over the past five years (2020-2024). "It's probably just trader response to the buying we saw a little bit this morning in addition to the slightly larger than expected storage report," said Robert DiDona, president of Energy Ventures Analysis.

"So you're probably seeing a bit of profit-taking from sessions over the last day or two."

Meanwhile, the Iranian military loaded naval mines onto vessels in the Persian Gulf last month, a move that intensified concerns in Washington that Tehran was gearing up to blockade the Strait of Hormuz following Israel's strikes on sites across Iran, according to two US officials.

"We don't think that the Strait of Hormuz will close, but if it does, about one-fifth of the world's LNG goes through there. So that would be very impactful to the market," said Ryan Parsons, senior analyst at energy consulting firm Gelber and Associates.

"Other things to look out for are LNG. We just had Sabine Pass come back from maintenance and so currently the market is exporting around 15 bcf per day and that should be heading towards all-time highs as we push into the end of this year."

Golden Pass LNG, which is owned by Exxon Mobil and QatarEnergy, has asked US regulators for permission to re-export liquefied natural gas from October 1, as the export plant nears production after previous delays.

The company said it plans to import an LNG cargo to cool down its Texas-based export facility, which is still under construction. Cooling down the plant is typically the final step before it begins producing LNG.

Dutch and British wholesale gas prices traded in a narrow range on Thursday due to stable supply from Norway and from liquefied natural gas, while demand from the power sector softened after the end of the heatwave.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; editing by Barbara Lewis and Marguerita Choy)