Investing.com - Natural gas prices extended Thursday's losses into Friday after data revealed U.S. stockpiles rose more than expected last week, though the commodity managed to come off earlier lows on concerns the tropics are brewing in the Gulf of Mexico.
On the New York Mercantile Exchange, natural gas futures for delivery in October were down 0.12% at $3.819 per million British thermal units during U.S. trading. The commodity hit a session low of $3.787, and a high of $3.849.
The October contract settled down 3.31% on Thursday to end at $3.823 per million British thermal units.
Natural gas futures were likely to find support at $3.761 per million British thermal units, Monday's low, and resistance at $4.016, Tuesday's high.
On Thursday the U.S. Energy Information Administration reported that natural gas storage in the U.S. in the week ended Sept. 5 rose by 92 billion cubic feet, well above expectations for an increase of 82 billion cubic feet, which sent prices tumbling.
Inventories rose by 64 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 60 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 21 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 2.801 trillion cubic feet. Stocks were 443 billion cubic feet less than last year at this time and 463 billion cubic feet below the five-year average of 3.264 trillion cubic feet for this time of year.
The commodity came off earlier lows as markets focused on the tropics. A low-pressure system trekking across southern Florida was poorly organized on Friday, though longer-range computer models suggested the system stood some chance to strengthen into a tropical cyclone in the Gulf of Mexico in the coming days.
The National Hurricane Center was reporting at the time of writing that the system stood a 20% chance of developing into a tropical cyclone in 48 hours and a 40% chance in five days.
Tropical storms and hurricanes in the Gulf of Mexico tend to send natural gas prices rising, as rigs evacuate to let the storm pass, which cuts into production.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were up 0.46% at $93.26 a barrel, while heating oil for October delivery were down 0.21% at $2.7502 per gallon.