Natural gas futures add to gains after bullish storage data

Investing.com - Natural gas futures extended gains on Thursday, after data showed that U.S. natural gas supplies fell more than forecast last week.

On the New York Mercantile Exchange, natural gas for delivery in February surged 10.2 cents, or 3.17%, to trade at $3.322 per million British thermal units during U.S. morning hours. Prices were at $3.294 prior to the release of the supply data.

Futures were likely to find support at $2.932 per million British thermal units, the low from January 14, and resistance at $3.400, the high from December 22.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 9 fell by 236 billion cubic feet, more than expectations for a decline of 224 billion and compared to a drop of 131 billion in the previous week.

Inventories fell by 268 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 190 billion cubic feet.

Total U.S. natural gas storage stood at 2.853 trillion cubic feet. Stocks were 282 billion cubic feet higher than last year at this time and 113 billion cubic feet below the five-year average of 2.966 trillion cubic feet for this time of year.

A day earlier, natural gas soared 29.0 cents, or 9.85%, to settle at $3.233, after weather forecasters predicted a return to colder weather by the end of the month, boosting heating fuel demand.

Bullish speculators are betting on the cooler weather to increase winter-heating demand for the fuel.

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

Elsewhere on the Nymex, crude oil for delivery in February shed 28 cents, or 0.58%, to trade at $48.20 a barrel, while heating oil for February delivery tacked on 0.01% to trade at $1.655 per gallon.