Natural gas advances ahead of inventories data

Natural gas futures rose on Wednesday, snapping six days of declines, on speculation that EIAs weekly storage report on Thursday will show inventories grew less than the average last week, indicating consisting demand for the power-station fuel.

On the New York Mercantile Exchange, natural gas for delivery in November rose by 0.69% to $3.584 per million British thermal units at 11:46 GMT. Prices held in range between days high of $3.595 and low at $3.561 per mBtu, near yesterdays two-week low. The fuel plunged 2.6% on Tuesday, a sixth consecutive daily decline, but trimmed its weekly loss to 2.7% after Wednesdays rebound.

Natural gas regained some of its positions on Wednesday amid expectations for a smaller build in inventories than both the five-year average and last years increase. Early injection estimates range between 61 billion and 71 billion cubic feet, compared to the five-year average 75 billion cubic feet increase and last years 79 billion build during the comparable week.

Prices hit a 2-month high last Thursday as EIA’s upbeat data surpassed both analysts’ projections and the five-year average. The government agency reported that U.S. natural gas stockpiles rose by 46 billion cubic feet in the week ended September 13. Total gas held in underground storage hubs now equaled 3 299 billion cubic feet and was 5.4% below last year’s 3 486 billion during the comparable week. The surplus over the five-year average inventories narrowed down to 0.5% after remaining unchanged for two weeks at 1.4%, indicating increased recent demand.

Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expected a build in the range between 55 billion to 59 billion cubic feet.

Market players continued to monitor short-term weather forecasts. Prices fell to a two-week low on Tuesday as weather forecasters predicted seasonal temperatures between September 28 and October 2. DTN reported a cold front later this week in the Southern Plains.