Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Natural gas bucks commodity sell off, moves higher on inventory

CommoditiesJul 20, 2012 11:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items - Natural gas futures traded higher during U.S. morning trade Friday, bucking the overall commodity selloff, as Thursday’s report from the U.S. Energy Information Administration indicated U.S. gas supplies rose less-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in August traded at USD3.018 per million British thermal units during U.S. trade, gaining 0.63%.     

The rally in gas continues, after Thursday when, the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended July 13 rose by 28 billion cubic feet, below market expectations for an increase of 34 billion cubic feet.

Inventories rose by 67 billion cubic feet in the same week a year earlier, while the five-year average change for the week is an increase of 74 billion cubic feet, according to U.S. Energy Department data.

Total U.S. natural gas storage stood at 3.163 trillion cubic feet as of last week. Stocks were 509 billion cubic feet higher than last year at this time and 470 billion cubic feet above the five-year average of 2.693 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 198 billion cubic feet above the five-year average, following a net injection of 23 billion cubic feet. 

Stocks in the Producing Region were 186 billion cubic feet above the five-year average of 934 billion cubic feet, after a net injection of 1 billion cubic feet.

U.S. gas inventories did not hit the milestone 3 trillion cubic feet level until August 31 of last year. 

Natural gas futures remained supported after updated weather forecasts showed that above-normal temperatures were expected to linger across the northern half of the U.S. for the next two weeks.

Industry weather group MDA EarthSat said Wednesday that it expected a steady surge of higher-than-normal temperatures in the U.S. Midwest and East over the next six to 10 days, and the forecast for the next two weeks has "warmed slightly" in the Northeast.

A bout of hot weather across much of the country over the last several weeks helped boost natural gas prices. Spot prices have rallied nearly 25% in the past three weeks, as extreme heat conditions in the U.S. mid-Atlantic boosted demand for the fuel.  

Warmer-than-normal temperatures increase the need for gas-fired electricity to power air conditioning, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.

From a technical standpoint, market participants noted that prices were expected to face strong resistance above the USD3.00-mark, a level widely considered to be where gas loses its appeal over coal for power generation.

Prices hit a seven-month high of USD3.050 on July 6, but have struggled to reclaim that level.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September gave back 1.47% to trade at USD91.60 a barrel. 
Natural gas bucks commodity sell off, moves higher on inventory

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email