Forexpros – Natural gas futures rallied sharply during U.S. morning trade on Thursday, surging to a one-week high after a report from the U.S. Energy Information Administration showed U.S. gas supplies rose less-than-expected last week.
On the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD2.349 per million British thermal units during U.S. morning trade, soaring 7.5%.
It earlier rose by as much as 8% to trade at USD2.369 per million British thermal units, the highest since June 7.
The July contract traded at USD2.212 prior to the release of the U.S. Energy Information Administration report.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 8 rose by 67 billion cubic feet, below market expectations for an increase of 75 billion cubic feet.
Inventories rose by 72 billion cubic feet in the same week a year earlier, while the five-year average change for the week is an increase of 88 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 2.944 trillion cubic feet as of last week. Stocks were 708 billion cubic feet higher than last year at this time and 666 billion cubic feet above the five-year average of 2.278 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 334 billion cubic feet above the five-year average, following a net injection of 43 billion cubic feet.
Stocks in the Producing Region were 242 billion cubic feet above the five-year average of 860 billion cubic feet, after a net injection of 11 billion cubic feet.
Natural gas prices fell to a six-week low overnight, before rebounding as the sharp decline created bargain buying opportunities for investors.
Some technical buying and short covering further supported prices, lifting them off the lows.
Prices have been on the decline since touching a three-month high of USD2.820 on May 21. Despite the recent run of losses, natural gas prices are still up 19% since touching a decade-low of USD1.902 on April 19, amid indications major North American natural gas producers were cutting back on production.
Speculation that utility providers in the U.S. were switching from pricier coal to cheaper natural gas provided further support over recent weeks. However, market players noted that sustained prices back above USD2.50 and toward the USD3.00-level likely would inspire some switching back to coal.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July eased up 0.15% to trade at USD82.72 a barrel, while heating oil for July delivery added 0.1% to trade at USD2.614 per gallon.
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