Natural gas snaps 3-day losing streak ahead of weekly storage data

Investing.com - U.S. natural gas prices rose for the first time in four sessions on Thursday, as market players looked ahead to fresh weekly information on U.S. gas inventories later in the day to gauge the strength of demand for the fuel.

On the New York Mercantile Exchange, natural gas for delivery in June jumped 3.5 cents, or 1.22%, to trade at $2.950 per million British thermal units during U.S. morning hours.

A day earlier, natural gas prices fell to $2.902, the weakest level since May 14, before closing at $2.915, down 3.3 cents, or 1.12%.

Futures were likely to find support at $2.888 per million British thermal units, the low from May 14, and resistance at $3.021, the high from May 20.

The U.S. Energy Information Administration is due to release its weekly storage report later in the session, which analysts expect will show a build of approximately 100 billion cubic feet for the week ending May 15.

Supplies rose by 106 billion cubic feet in the same week last year, while the five-year average change is an increase of 89 billion cubic feet.

Total U.S. natural gas storage stood at 1.897 trillion cubic feet as of last week, 65.7% above year-ago levels and 2.0% below the five-year average for this time of year.

Last spring, supplies were 55% below the five-year average, indicating producers have made up for most of last winter’s unusually strong demand.

Meanwhile, updated weather forecasting models pointed to hotter-than-normal temperatures on the East Coast through May 29, boosting early summer cooling demand for the fuel.

Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.

Elsewhere on the Nymex, crude oil for delivery in July rose 83 cents, or 1.4%, to trade at $59.81 a barrel, while heating oil for June delivery tacked on 1.17% to trade at $1.968 per gallon.