Natural gas futures erase losses after U.S. supply data

Investing.com - Natural gas futures trimmed losses to trade little changed on Thursday, despite U.S. government data showing that natural gas supplies rose more-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.620 per million British thermal units during U.S. morning trade, little changed.

Futures traded at USD3.573 prior to the release of the U.S. Energy Information Administration report.  

Nymex gas prices fell to a session low of USD3.557 per million British thermal units earlier, the weakest level since October 7. The November contract settled 1.06% higher at USD3.619 per million British thermal units on Monday.

Nymex gas futures were likely to find support at USD3.521 per million British thermal units, the low from October 7 and resistance at USD3.668, the high from October 22.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended October 18 rose by 87 billion cubic feet, above forecasts for an increase of 79 billion cubic feet.

Inventories increased by 54 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 75 billion cubic feet.

Total U.S. natural gas storage stood at 3.741 trillion cubic feet. Stocks were 92 billion cubic feet less than last year at this time and 77 billion cubic feet above the five-year average of 3.664 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 80 billion cubic feet below the five-year average, following net injections of 50 billion cubic feet.

Stocks in the Producing Region were 106 billion cubic feet above the five-year average of 1.139 billion cubic feet after a net injection of 33 billion cubic feet.

Meanwhile, market participants continued to focus on weather forecasts to gauge the strength of demand for the fuel.

Near-term weather forecasts pointed to colder-than-normal temperatures across most parts of the eastern half of the U.S.

However, extended weather forecasting models called for above-average weather across most of the nation throughout most of November.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand.

The U.S. heating season runs from November through March, and is considered the peak demand period for gas consumption.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December shed 0.4% to trade at USD96.47 a barrel, while heating oil for November delivery dipped 0.3% to trade at USD2.915 per gallon.