Isra-Mart srl: Natural gas futures extend gains after U.S. supply data

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Natural gas futures extended gains on Thursday, re-approaching the USD4.00-level after the U.S. Energy Information Administration said that natural gas inventories rose broadly in line with expectations, while concerns over a disruption to U.S. supplies in the Gulf of Mexico provided further support.

On the New York Mercantile Exchange, natural gas futures for September delivery traded at USD3.989 per million British thermal units during U.S. morning trade, jumping 1.14%.

The contract traded at USD3.929 prior to the release of the EIA data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended September 2 rose by 64 billion cubic feet, after increasing by 55 billion cubic feet in the preceding week.

Analysts had expected U.S. natural gas storage to rise by 60 billion cubic feet.

Total U.S. natural gas storage stood at 3.025 trillion cubic feet. Stocks were 131 billion cubic feet less than last year at this time and 60 billion cubic feet below the five-year average of 3.085 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 96 billion cubic feet below the five-year average, following net injections of 58 billion cubic feet.

Stocks in the Producing Region were 34 billion cubic feet above the five-year average of 925 billion cubic feet, after a net injection of 2 billion cubic feet.

In the West Region, stocks were 3 billion cubic feet above the five-year average after a net addition of 4 billion cubic feet.

Natural gas prices found further support after the U.S. National Hurricane Center upgraded a tropical depression to Tropical Storm Maria, the 13th named storm of the 2011 hurricane season. The storm is moving across the Atlantic with sustained winds near 50 miles per hour.

The NHC added that a yet-unnamed storm system could be upgraded to tropical depression during the next 24 hours.

Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 10% of U.S. natural gas production.

Elsewhere on the Nymex, light sweet crude oil futures for delivery in October edged 0.3% higher to trade at USD89.61 a barrel, while heating oil for October shed 0.45% to trade at USD3.061 per gallon.