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US natural gas futures extend gains after storage data

Published 08/18/2016, 10:34 AM
Updated 08/18/2016, 10:34 AM
© Reuters.  U.S. gas stockpiles rise less than expected last week

© Reuters. U.S. gas stockpiles rise less than expected last week

Investing.com - U.S. natural gas futures extended gains in North American trade on Thursday, after data showed that natural gas supplies in storage in the U.S. rose less than expected last week.

Natural gas for delivery in September on the New York Mercantile Exchange jumped 4.7 cents, or 1.79%, to trade at $2.666 per million British thermal units by 14:33GMT, or 10:33AM ET.

Futures were at around $2.635 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. rose by 22 billion cubic feet in the week ended August 12, while analysts had forecast an increase of 27 billion.

That compared with an advance of 29 billion cubic feet in the preceding week, 52 billion a year earlier and a five-year average of 57 billion cubic feet.

Total U.S. natural gas storage stood at 3.339 trillion cubic feet, 10.9% higher than levels at this time a year ago and 13.8% above the five-year average for this time of year.

A day earlier, prices inched forward 0.2 cents, or 0.08%, as traders waited for the fresh weekly storage data.

Meanwhile, updated weather forecasting models pointed to scorching heat along the U.S. east coast through August 21. The weather will then be hotter than normal in the Mid-Atlantic and Great Lakes region through August 26.

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.

Natural gas futures have been under pressure in recent days amid speculation that August heat won’t prevent stockpiles from reaching a record before the winter.

Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.

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