Investing.com - U.S. natural gas futures initially extended gains in North American trade on Thursday, immediately after data showed that natural gas supplies in storage in the U.S. rose less than expected last week, but quickly returned to levels seen prior to the release of the data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 43 billion cubic feet in the week ended August 18, while analysts had forecast a decrease of just 45 billion.
Natural gas for delivery in August on the New York Mercantile Exchange gained 4.6 cents, or 1.54%, to trade at $2.972 per million British thermal units by 10:33AM ET (14:33GMT).
Futures initially popped to hit an intraday high of $2.982, but quickly pared those gains and were last up around 1.46% at around $2.971 prior to the release of the supply data.
That compared with a build of 53 billion cubic feet (bcf) in the preceding week and represented a decline of 223 billion from a year earlier but was 45 bcf above the five-year average.
Total U.S. natural gas storage stood at 3.125trillion cubic feet, 6.7% lower than levels at this time a year ago and 1.5% above the five-year average for this time of year.
A weather system with showers and cooling will sweep across the central and east-central U.S. through the end of the week, dropping demand to much lighter levels due to highs only reaching the 70s to lower 80s Fahrenheit.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on late-summer cooling demand.
Nearly 50% of all U.S. households use gas for cooling.