Natural gas futures rally more than 4% after bullish supply data

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Investing.com - Natural gas futures rose sharply on Thursday, after data showed that U.S. natural gas supplies fell more-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in March rose to a session high of USD5.056 per million British thermal units, the most since February 6.

Natural gas prices last traded at USD5.036 during U.S. morning trade, up 4.45%. Futures traded at USD4.932 prior to the release of the supply data.

The March contract settled 0.04% lower on Wednesday to end at USD4.822 per million British thermal units.

Natural gas futures were likely to find support at USD4.780 per million British thermal units, the low from February 12 and resistance at USD5.396, the high from February 6.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended February 7 fell by 237 billion cubic feet, compared to expectations for a decline of 233 billion cubic feet.

The five-year average change for the week is a decline of 162 billion cubic feet.

Total U.S. natural gas storage stood at 1.686 trillion cubic feet. Stocks were 863 billion cubic feet less than last year at this time and 631 billion cubic feet below the five-year average of 2.317 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 315 billion cubic feet below the five-year average, following net withdrawals of 106 billion cubic feet.

Stocks in the Producing Region were 232 billion cubic feet below the five-year average of 845 billion cubic feet after a net withdrawal of 89 billion cubic feet.

Meanwhile, freezing temperatures and heavy snow was expected across most parts of the U.S. Northeast and Southern part of the country.

Bullish speculators are betting that the winter storm will increase demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Natural-gas inventories have fallen sharply since November as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March dipped 0.15% to trade at USD100.22 a barrel, while heating oil for March delivery added 0.05% to trade at USD3.013 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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