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Natural gas futures off the highs after bearish storage data

Published 10/30/2014, 10:39 AM
Natural gas futures trim gains after supply data

Investing.com - Natural gas futures came off the highest levels of the session on Thursday, after data showed that U.S. natural gas supplies rose more than forecast last week.

On the New York Mercantile Exchange, natural gas for delivery in December tacked on 1.8 cents, or 0.48%, to trade at $3.806 per million British thermal units during U.S. morning hours. Prices were at $3.807 prior to the release of the supply data.

A day earlier, natural gas prices jumped 5.7 cents, or 1.53%, to settle at $3.788 per million British thermal units.

Futures were likely to find support at $3.696 per million British thermal units, the low from October 29, and resistance at $3.857, the high from October 15.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended October 24 rose by 87 billion cubic feet, above expectations for an increase of 85 billion and compared to a gain of 94 billion in the previous week.

Inventories rose by 45 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 59 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 28 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 3.480 trillion cubic feet. Stocks were 294 billion cubic feet less than last year at this time and 310 billion cubic feet below the five-year average of 3.790 trillion cubic feet for this time of year.

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Meanwhile, updated weather-forecasting models predicted cold Canadian air to make its way south in the lower 48 states in the coming days, potentially driving demand for heating.

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 December lost 92 cents, or 1.12%, to trade at $81.28 a barrel, while heating oil for December delivery dropped 0.76% to trade at $2.504 per gallon.

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