Forexpros – Natural gas futures surged higher during U.S. afternoon trade on Thursday, adding to gains 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 USD2.584 per million British thermal units during U.S. afternoon trade, surging 2.64%.
It earlier rose by as much as 4% to trade at a session high of USD2.623 per million British thermal units.
The July contract traded at USD2.545 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 15 rose by 62 billion cubic feet, below market expectations for an increase of 64 billion cubic feet.
Inventories rose by 90 billion cubic feet in the same week a year earlier, while the five-year average change for the week is an increase of 87 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 3.006 trillion cubic feet as of last week. Stocks were 680 billion cubic feet higher than last year at this time and 641 billion cubic feet above the five-year average of 2.365 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 313 billion cubic feet above the five-year average, following a net injection of 37 billion cubic feet.
Stocks in the Producing Region were 240 billion cubic feet above the five-year average of 876 billion cubic feet, after a net injection of 14 billion cubic feet.
Forecasts for warmer-than-normal weather across key parts of the U.S. in the coming days boosted near-term demand expectations for the fuel.
However, temperatures are expected to moderate in the following week. Temperatures in the Northeast, mid-Atlantic and Midwest were expected to climb toward record highs approaching 100 degrees Fahrenheit this week.
But forecasters predicted a drop to below-normal temperatures in the heavily populated Northeast from the weekend and into early July.
The start of the Atlantic hurricane season has been providing additional support to the market in recent sessions as well.
Natural gas prices are up nearly 25% 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 August tumbled 3.77% to trade at USD78.38.
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