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U.S. gas futures rally 3% on hopes for bullish storage data

Investing.com -

Investing.com - U.S. natural gas futures rallied in early trade on Wednesday, as market players looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.

Natural gas for delivery in September on the New York Mercantile Exchange jumped 7.7 cents, or 2.82%, to trade at $2.810 per million British thermal units by 13:38GMT, or 9:38AM ET.

Sentiment was boosted amid speculation this week's storage report will show the smallest build for the week ended July 29 since at least 2010.

The U.S. Energy Information Administration's storage report slated for release on Thursday is expected to show a build of approximately 10 billion cubic feet, as a recent heat wave prompted households to ramp up their air conditioning.

That compares with a build of 17 billion cubic feet in the preceding week, 41 billion a year earlier and a five-year average of 54 billion cubic feet.

Total U.S. natural gas storage stood at 3.294 trillion cubic feet, 13.2% higher than levels at this time a year ago and 15.9% above the five-year average for this time of year.

A day earlier, prices lost 3.8 cents, or 1.37%, as traders reacted to milder weather and the reality that higher summer demand for the commodity is coming to an end.

Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.

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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 Nasdaq, Inc.


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

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