Forexpros – Natural gas futures rallied Thursday, gaining more than 5% after a report from the U.S. Energy Information Administration indicated natural gas inventories fell last week.
On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD2.57 per million British thermal units during U.S. morning trade, soaring 5.96%.
It is presently trading at the sessions high and price hit a low of USD2.42 earlier prior to the release of U.S. Energy Information Administration inventory report.
The EIA stated natural gas storage in the U.S. in the week ended February 10 fell by 127 billion cubic feet, after declining by 78 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 126 billion cubic feet.
Inventories fell by 230 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 178 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 2.761 trillion cubic feet as of last week. Stocks were 817 billion cubic feet higher than last year at this time and 765 billion cubic feet above the five-year average of 1.996 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 302 billion cubic feet above the five-year average, following a withdrawal of 83 billion cubic feet.
Stocks in the Producing Region were 365 billion cubic feet above the five-year average of 686 billion cubic feet, after a net withdrawal of 37 billion cubic feet.
Despite the strong gain, prices were expected to remain under pressure as concerns over elevated U.S. inventory and production levels still lingered.
Inventory withdrawals this winter are running nearly 480 billion cubic feet below average, or about 33%, due to the lack of heating demand this winter.
Natural gas traders continued to monitor weather forecasts in key gas-consuming regions in the U.S. to gauge demand for the heating fuel.
Weather forecasters are predicting colder-than-normal temperatures across much of the U.S. West Coast and Rocky Mountain-region states in the next three-to-five-days.
However, milder temperatures were expected to return across most of the U.S. during the final two weeks of February.
This is typically the coldest time in winter, but temperatures in the U.S. have yet to reach levels cold enough to boost demand for the heating fuel, keeping prices depressed at unseasonably low levels.
Winter so far in the U.S. has been the second mildest since 1950. It is running about 13% warmer than the 30-year normal, according to recent data from MDA EarthSat.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April gained 0.56% to trade at USD102.71 a barrel.
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