Natural gas futures rally 3% after bullish U.S. supply data

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Investing.com - Natural gas futures rallied sharply on Thursday, after data showed that U.S. natural gas supplies fell by the most on record last week.

On the New York Mercantile Exchange, natural gas futures for delivery in January traded at USD4.379 per million British thermal units during U.S. morning trade, up 3%. Futures traded at USD4.332 prior to the release of the U.S. Energy Information Administration report.

Nymex January gas futures rose by as much as 3.35% earlier in the day to hit a session high of USD4.399, the strongest level since December 13. The January contract settled down 0.84% on Wednesday to end at USD4.251 per million British thermal units.

Natural gas futures were likely to find support at USD4.244 per million British thermal units, the low from December 18 and resistance at USD4.443, the high from December 13.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended December 13 fell by 285 billion cubic feet, compared to expectations for a withdrawal of 258 billion cubic feet.

Inventories fell by 70 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 133 billion cubic feet.

Total U.S. natural gas storage stood at 3.248 trillion cubic feet. Stocks were 488 billion cubic feet less than last year at this time and 261 billion cubic feet below the five-year average of 3.509 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 207 billion cubic feet below the five-year average, following net withdrawals of 132 billion cubic feet.

Stocks in the Producing Region were 23 billion cubic feet below the five-year average of 1.138 billion cubic feet after a net withdrawal of 99 billion cubic feet.

Meanwhile, market players continued to focus on weather forecasts to gauge the strength of demand for the fuel.

The U.S. National Weather Service said it expected above-normal temperatures along the East coast from New York to Florida in the next six-to-10-days. The agency's eight-to-14-day outlook showed above-normal temperatures in the western part of the country.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February added 0.45% to trade at USD98.51 a barrel, while heating oil for January delivery rose 0.35% to trade at USD3.020 per gallon.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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