Natural gas futures down 1% after first inventory build of season
Natural gas futures turned lower on Thursday, after data showed that U.S. natural gas supplies rose for the first time since last April, cutting the withdrawal season short.
On the New York Mercantile Exchange, natural gas for delivery in May tumbled 2.9 cents, or 1.06%, to trade at $2.711 per million British thermal units during U.S. morning hours. Prices were at around $2.745 prior to the release of the supply data.
Futures were likely to find support at $2.667 per million British thermal units, the low from March 9, and resistance at $2.833, the high from March 24.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended March 20 rose by 12 billion cubic feet, compared to expectations for an increase of 6 billion.
Supplies fell by 56 billion in the same week last year, while the five-year average change is a decline of 19 billion cubic feet.
Total U.S. natural gas storage stood at 1.479 trillion cubic feet as of last week. Stocks were 575 billion cubic feet higher than last year at this time and 194 billion cubic feet below the five-year average of 1.673 trillion cubic feet for this time of year.
On Wednesday, the May contract tumbled 7.0 cents, or 2.49%, to settle at $2.740 amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.
Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.
Elsewhere on the Nymex, crude oil for delivery in May climbed $1.20, or 2.44%, to trade at $50.41 a barrel, while heating oil for April delivery rallied 2.45% to trade at $1.770 per gallon.