Natural gas futures - weekly outlook: May 11 - 15

Investing.com - Natural gas futures soared more than 5% on Friday to hit a seven-week peak, as a bout of technical buying kicked in after prices broke above key resistance levels.

On the New York Mercantile Exchange, natural gas for delivery in June hit an intraday peak of $2.888 per million British thermal units, the strongest level since March 20, before ending the week at $2.880, up 14.6 cents, or 5.34%.

On Thursday, natural gas declined 4.2 cents, or 1.51%, to end at $2.734. For the week, the June natural gas contract jumped 14.2 cents, or 3.75%, the second straight weekly gain.

Futures were likely to find support at $2.711 per million British thermal units, the low from May 7, and resistance at $2.933, the high from March 20.

Gains accelerated after futures climbed above the 100-day moving average for the first time since December, triggering fresh buy orders amid bullish chart signals.

Meanwhile, forecasts for warmer weather across the U.S. over the next two weeks lifted near-term demand expectations for the fuel.

Updated weather forecasting models called for warmer-than-average weather over much of the Midwest and Northeast, as well as the South, which was likely to boost cooling demand.

Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. rose by 76 billion cubic feet, compared to expectations for an increase of 75 billion and following a build of 81 billion cubic feet in the preceding week.

Supplies rose by 68 billion cubic feet in the same week last year, while the five-year average change is an increase of 75 billion cubic feet.

Total U.S. natural gas storage stood at 1.786 trillion cubic feet as of last week, 71.1% above year-ago levels and 3.6% below the five-year average for this time of year.

Last spring, supplies were 55% below the five-year average, indicating producers have made up for most of last winter’s unusually strong demand.

The EIA's next storage report slated for release on Thursday, May 14 is expected to show a build of approximately 125 billion cubic feet for the week ending May 8.

Supplies rose by 101 billion cubic feet in the same week last year, while the five-year average change is an increase of 82 billion cubic feet.

Elsewhere on the Nymex, crude oil for June delivery settled at $59.39 a barrel by close of trade on Friday, up 9 cents, or 0.41%, on the week, while heating oil for June delivery shed 1.44% on the week to settle at $1.953 per gallon.