Natural gas surges more than 4% following EIA’s report

Natural gas rose more than 4% in early U.S. Trading after the Energy Information Administration said in its weekly report that U.S. natural gas stockpiles rose below expectations last week.

On the New York Mercantile Exchange, natural gas for August delivery surged to $3.790 per million British thermal units at 14:57 GMT, up 4.42% on the day. Prices held in range between days high at $3.805, highest since June 24, and low of $3.608 per mBtu. The fuel settled lower during the past two days but erased earlier losses and advanced to over 4.10% on a weekly basis following EIAs supply data.

The Energy Information Administration reported that U.S. Natural gas stockpiles rose by 58 billion cubic feet to 2 745 billion as of the week ending July 12. This was below market expectations for a 64 billion cubic feet gain and the five-year average 70 billion.

During the same week last year, natural gas reserves rose by 29 billion cubic feet to 3 159 billion, which was 13.1% higher than this weeks total stockpiles. The five-year average storage stood at 2 779 billion cubic feet, 1.2% above the current.

Meanwhile, market players remained focused on weather forecasting models, which showed above-normal temperatures across key consuming regions in the U.S. during the next three days. Temperatures in the Northeast were expected to remain high during the weekend. When above-normal temperatures are expected, natural gas surges as increased electricity demand to power air-conditioning calls for more supply of the fuel, which is used for a quarter of the U.S. electricity generation.

However, long-term forecasts for the next 11-to-15 days showed projections for a fall back to normal seasonal temperatures in the Northeast.

Elsewhere on the market, WTI crude for September delivery hit a new 16-month high at $107.82 per barrel following upbeat U.S. Jobless data. Light, sweet crude traded at $107.53 per barrel at 14:55 GMT, up 1.11% on the day. Meanwhile, Brent oil for September delivery stood at $108.70, up 0.08% on the day. The European benchmark ranged between days high and low of $108.79 and $108.04 respectively.