Natural gas futures rally to 3-week high after bullish U.S. supply data

Investing.com - Natural gas futures rallied to a three-week high on Thursday, after a report from the U.S. Energy Information Administration showed that natural gas supplies rose less-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.753 per million British thermal units during U.S. morning trade, up 2%.

Prices traded at USD3.762 prior to the release of the U.S. Energy Information Administration report.  

Nymex gas price rose to a session high of USD3.780 per million British thermal units earlier, the strongest level since September 19.

The November contract settled 1% lower at USD3.679 per million British thermal units on Wednesday.

Futures were likely to find support at USD3.482 per million British thermal units, the low from October 4 and resistance at USD3.809, the high from September 19.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended October 4 rose by 90 billion cubic feet, below market expectations for an increase of 94 billion cubic feet.

Inventories increased by 73 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 84 billion cubic feet.

Total U.S. natural gas storage stood at 3.577 trillion cubic feet as of last week. Stocks were 138 billion cubic feet less than last year at this time and 55 billion cubic feet above the five-year average of 3.522 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 101 billion cubic feet below the five-year average, following net injections of 51 billion cubic feet.

Stocks in the Producing Region were 102 billion cubic feet above the five-year average of 1.086 billion cubic feet after a net injection of 30 billion cubic feet.

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

Updated weather forecasting models pointed to warmer-than-average temperatures in the central and eastern U.S. through October 21, boosting near-term demand expectations for the fuel.

Forecasts originally called for seasonably mild temperatures during the period.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November added 0.4% to trade at USD102.02 a barrel, while heating oil for November delivery jumped 1.1% to trade at USD3.049 per gallon.