Natural Gas Shoots Up

[Jhon Kumar]

Natural gas prices shot up on Thursday after data revealed inventories rose more than expected though still small enough to allay supply concerns. On the New York Mercantile Exchange, natural gas futures for delivery in June traded at $4.456 per million British thermal units during U.S. trading, up 2.03%. The commodity hit session high of $4.508 and a low of $4.327. The June contract settled up 0.21% on Wednesday to end at $4.367 per million British thermal units. Natural gas futures were likely to find support at $4.222 per million British thermal units, the low from April 2, and resistance at $4.825, last Wednesday's high. In a report, Energy Information Administration said that U.S. Natural Gas Storage rose by 105 billion cubic feet in the week ending May 9, up from 74 billion cubic feet in the preceding month. Analysts had expected U.S. Natural Gas Storage to rise 99 billion cubic feet last week. Prices rose on the news, as analysts viewed the build as small. U.S. stockpiles need to fill by November at the start of the heating season, which means quantities going into to storage must rise, as the possibilities of a winter storage still remain. Stockpiles are 40% below their level this time last year and 45% below the five-year average. Producers would need to add 2.6 trillion to 2.9 trillion cubic feet to storage by November 1 to meet typical winter demand.