Natural gas futures continued to grind lower in early trading Friday as market participants factored in mild December forecasts and a bearish miss from recent government inventory data.

NGI Morning Natural Gas Price & Markets Coverage

The January Nymex contract was down 1.4 cents to $2.788/MMBtu at around 8:43 a.m. ET.

The U.S. Energy Information Administration (EIA) on Thursday reported a 10 Bcf injection into Lower 48 storage for the week ended Nov. 24, bearish versus expectations for a small net withdrawal. The build also came in sharply looser than the 44 Bcf five-year average withdrawal, lifting the year-on-five-year surplus to 303 Bcf for the period, EIA data show.

“On a weather-adjusted basis, we estimate the market was 6 Bcf/d oversupplied versus a 1 Bcf/d undersupply the week prior,” analysts at Tudor,...