Forexpros – 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.&nb
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