Investing.com - U.S. natural gas futures held on to sharp gains in North America trade on Thursday, despite data showing that natural gas supplies in storage in the U.S. rose more than feared last week.
Natural gas for delivery in May on the New York Mercantile Exchange surged 6.1 cents, or 3.19%, to trade at $1.971 per million British thermal units by 14:35GMT, or 10:35AM ET. Prices were at around $1.969 prior to the release of the supply data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended April 1 rose by 12 billion cubic feet, compared to expectations for a gain of 8 billion.
That compares with a withdrawal of 25 billion cubic feet in the prior week and a five-year average decline of around 15 billion for this time of year.
Total U.S. natural gas storage stood at 2.480 trillion cubic feet, 40.6% higher than levels at this time a year ago and 35.3% above the five-year average for this time of year.
Some market experts worry that stockpiles at the end of March will hit at an all-time high of around 2.5 trillion cubic feet, topping the end-of-withdrawal-season high of 2.472 set at the end of March in 2012.
Meanwhile, updated weather forecasting models pointed to a burst of chillier-than-normal weather across most parts of the U.S. in the coming days.
Midwestern and Northeastern temperatures are expected to fall below normal in the first week in April amid a late season cold front, while a fast warm-up in the west is expected to drive cooling demand.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on late-winter heating demand.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.
The heating season from November through March is the peak demand period for U.S. gas consumption. However, a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel.
Natural gas futures are up almost 19% since hitting a 20-year low of $1.611 in early March. Despite recent gains, prices are still down nearly 10% so far this year as weak winter heating demand, near-record production and record-high storage levels dragged down prices.