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Natural gas futures rally more than 2% after bullish storage data

Commodities Apr 02, 2015 10:34AM ET
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© Reuters. Natural gas futures extend gains after bullish storage data

Investing.com - Natural gas futures extended gains on Thursday, after data showed that U.S. natural gas supplies fell more than expected last week.

On the New York Mercantile Exchange, natural gas for delivery in May jumped 7.3 cents, or 2.82%, to trade at $2.679 per million British thermal units during U.S. morning hours. Prices were at around $2.629 prior to the release of the supply data.

Futures were likely to find support at $2.583, the low from April 1, and resistance at $2.697, the high from March 27.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended March 27 fell by 18 billion cubic feet, compared to expectations for a decline of 10 billion and following a 12 billion cubic feet rise in the preceding week.

Supplies fell by 71 billion cubic feet in the same week last year, while the five-year average change is a decline of 22 billion cubic feet.

Total U.S. natural gas storage stood at 1.461 trillion cubic feet as of last week. Stocks were 628 billion cubic feet higher than last year at this time and 190 billion cubic feet below the five-year average of 1.651 trillion cubic feet for this time of year.

A day earlier, natural gas prices fell to $2.583, the lowest level since September 2012, before ending at $2.605, down 3.5 cents, or 1.33%.

Updated weather forecasting models showed that colder temperatures will impact the U.S. east coast from April 4 to April 6, while the rest of the country will enjoy seasonal or higher temperatures.

Prices are likely to remain vulnerable in the near-term as the coldest part of the winter has effectively passed and below-normal temperatures in March and April mean less than they do in January and February.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption.

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 May shed 70 cents, or 1.4%, to trade at $49.39 a barrel, while heating oil for May delivery tumbled 2.3% to trade at $1.706 per gallon.

Natural gas futures rally more than 2% after bullish storage data
 

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