Natural gas futures surge 4% after U.S. supply data

Investing.com - Natural gas futures rallied sharply 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 August traded at USD3.772 per million British thermal units during U.S. morning trade, up 3.9% on the day.       

The August contract rose by as much as 4.1% earlier in the day to hit a session high of USD3.778 per million British thermal units, the strongest level since July 10.

The August contract traded at USD3.687 prior to the release of the U.S. Energy Information Administration report.  

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended July 12 rose by 58 billion cubic feet, below market expectations for an increase of 64 billion cubic feet.

Inventories rose by 29 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 70 billion cubic feet.

Total U.S. natural gas storage stood at 2.745 trillion cubic feet as of last week. Stocks were 414 billion cubic feet less than last year at this time and 34 billion cubic feet below the five-year average of 2.779 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 37 billion cubic feet.

Stocks in the Producing Region were 36 billion cubic feet above the five-year average of 977 billion cubic feet after a net injection of 15 billion cubic feet.

Meanwhile, market players focused on near-term weather forecasts to gauge the strength of demand for the fuel.

Weather forecasting models continued to point to blistering heat across key consuming regions in the U.S. during the next three days, boosting near-term demand expectations for the fuel.

Temperatures across the U.S. Northeast were expected to remain in the 90’s into the weekend.

But longer-term outlooks pointed to moderating temperatures for next week.

In the outlook for the next 11-to-15 days, weather conditions in the Northeast are expected to fall back to normal seasonal levels.

The U.S. Northeast is a key gas-consuming region. Moderate summer temperatures reduce the need for gas-fired electricity to cool homes.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September rose 1% to trade at a 16-month high of USD107.39 a barrel, while heating oil for August delivery climbed 0.9% to trade at USD3.099 per gallon.