Natural gas trades near 6-week high with all eyes on weekly storage data

Investing.com - U.S. natural gas prices held near a six-week high on Wednesday, as market participants looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.

On the New York Mercantile Exchange, natural gas for delivery in June inched up 1.1 cents, or 0.41%, to trade at $2.792 per million British thermal units during U.S. morning hours. Futures held in a range between $2.748 and $2.798.

A day earlier, natural gas prices fell 4.1 cents, or 1.45%, to close at $2.780. Futures rallied to a six-week peak of $2.824 on Monday.

Prices were likely to find support at $2.714 per million British thermal units, the low from May 1, and resistance at $2.824, the high from May 4.

The U.S. Energy Information Administration's next storage report due on Thursday is expected to show a build of approximately 73 billion cubic feet for the week ending May 1.

Supplies rose by 68 billion cubic feet in the same week last year, while the five-year average change is an increase of 75 billion cubic feet.

Total U.S. natural gas storage stood at 1.710 trillion cubic feet as of last week, 76.5% above year-ago levels and 4.2% 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 all of last winter’s unusually strong demand.

Meanwhile, updated weather forecasting models called for warmer-than-average weather over much of the Midwest and Northeast, as well as the South in the first two weeks of May, which was likely to boost cooling demand.

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

Elsewhere on the Nymex, crude oil for delivery in June rallied $1.23, or 2.04%, to trade at $61.63 a barrel, while heating oil for June delivery jumped 1.41% to trade at $2.043 per gallon.