Forexpros – Natural gas futures rallied sharply on Thursday, after the U.S. Energy Information Administration said that natural gas inventories declined unexpectedly last week, signaling the start of the peak heating demand season in the U.S.
On the New York Mercantile Exchange, natural gas futures for delivery in January traded at USD3.683 per million British thermal units during U.S. morning trade, soaring 3.73%.
It earlier rose by as much as 3.9% to trade at USD3.688 per million British thermal units, the highest since November 28.
The January contract traded at USD3.547 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 November 25 fell by 1 billion cubic feet, after increasing by 9 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to rise by 11 billion cubic feet. Supplies declined by 21 billion cubic feet in the same week a year earlier, while the five-year average change is a drawdown of 29 billion cubic feet.
Total U.S. natural gas storage stood at 3.851 trillion cubic feet as of last week, hovering below the all-time high of 3.867 hit in early November.
Stocks were 41 billion cubic feet higher than last year at this time and 261 billion cubic feet above the five-year average of 3.590 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 73 billion cubic feet above the five-year average, following net withdrawals of 17 billion cubic feet.
Stocks in the Producing Region were 159 billion cubic feet above the five-year average of 1.102 trillion cubic feet, after a net injection of 14 billion cubic feet.
Historically, last week was usually the week when the market flips from growing inventories to declining inventories, with winter weather driving up demand as people heat their homes.
Prices have been under pressure in recent weeks as mild weather in key gas-consuming regions in the U.S. limited early-season heating demand.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in January eased down 0.1% to trade at USD100.25 a barrel, while heating oil for January delivery slumped 0.8% to trade at USD3.001 per gallon.
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