Natural gas futures edge higher after storage data

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

On the New York Mercantile Exchange, natural gas for delivery in February rose 2.8 cents, or 0.98%, to trade at $2.899 per million British thermal units during U.S. morning hours. Prices were at $2.881 prior to the release of the supply data.

A day earlier, natural gas plunged 6.7 cents, or 2.28%, to settle at $2.871.

Futures were likely to find support at $2.805 per million British thermal units, the low from January 2, and resistance at $3.176, the high from January 5.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 2 fell by 131 billion cubic feet, more than expectations for a decline of 121 billion and compared to a drop of 26 billion in the previous week.

Inventories fell by 191 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 131 billion cubic feet.

Total U.S. natural gas storage stood at 3.089 trillion cubic feet. Stocks were 250 billion cubic feet higher than last year at this time and 67 billion cubic feet below the five-year average of 3.156 trillion cubic feet for this time of year.

Meanwhile, market players continued to assess the outlook for U.S. demand levels.

Updated weather forecast models continued to call for frigid temperatures in the key Northeast and Midwest markets in the next three-to-five days, boosting near-term demand expectations for the heating fuel.

However, extended forecasts showed higher readings were expected for most of the nation from January 16 through January 20.

Bearish speculators are betting on the mild weather to dampen demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

Elsewhere on the Nymex, crude oil for delivery in February picked up 10 cents, or 0.21%, to trade at $48.75 a barrel, while heating oil for February delivery tacked on 0.37% to trade at $1.706 per gallon.