Natural gas exchange traded funds brightened Thursday as the U.S. Energy Information Administration revealed unexpectedly lower gas inventories.
NYMEX natural gas futures were up 2.2% Thursday, trading around $3.54 per million British thermal units.
The EIA revealed that inventories increased 57 billion cubic feet in the week ended Aug. 16, compared to analyst projections of a 65 bcf gain, reports Christine Buurma for Bloomberg.
“The storage number was well below expectations,” Aaron Calder, an analyst at Gelber & Associates, said in the article. “Gas demand from power generators has been strong. The forecasts are showing hotter-than-normal temperatures across the Midwest and there’s really going to be significant cooling demand.”
Commodity Weather Group forecasts higher-than-normal temperatures in the Midwest through Sept. 5.
Total storage was at 3.063 trillion cubic feet, or 56 bcf higher than the five-year average. Supply was 7.2% below the same levels year-over-year and down 7.7% week-over-week.
Potential investors should be aware that output could rise 1% year-over-year to a record due to a rise in onshore supply and new extracting techniques.
“North America simply remains awash with dry natural gas,” Francisco Blanch, head of commodities research at Bank of America, said in the article.
United States Natural Gas Fund
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Max Chen contributed to this article.