Natural Gas Flat as US Storage Levels Rise Less Than Expected

Natural gas futures erased their gains on Thursday and were trading flat toward the end of the session following a smaller-than-expected build in US inventories, according to new government data.

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November natural gas futures were unchanged at $3.474 per million British thermal units (Btu) at 17:40 GMT on Thursday on the New York Mercantile Exchange. Natural gas is on track for a weekly gain of more than 10% and is up almost 12% year-to-date.

US natural gas prices had surged as much as 12 cents before erasing their gains.

New US Energy Information Administration (EIA) data show that domestic natural gas inventories advanced by 53 billion cubic feet for the week ending September 26, down from the previous week’s build of 75 billion cubic feet. This also came in below the market consensus of 67 billion cubic feet.

Virtually all of the increase occurred in the East (25 billion cubic feet) and the Midwest (27 billion cubic feet). The South Central region registered a withdrawal of four billion cubic feet.

In total, US natural gas supplies stand at 3.561 trillion cubic feet, up 21 billion cubic feet from the same time a year ago. They are also 171 billion cubic feet above the five-year average of 3.39 trillion cubic feet.

Natural gas has been on a tear in recent days, mainly due to temperature forecasts, says Phil Flynn, energy strategist at The PRICE Futures Group.

“Natural gas hit some upper resistance to pause its impressive counter-seasonal rally. It’s about heat today and cold tomorrow’s raising demand expectations amid expectations of record LNG exports,” Flynn said in an Oct. 2 note.

In other energy commodities, November West Texas Intermediate (WTI) crude oil futures fell $1.17, or 1.89%, to $60.61 a barrel. December Brent crude futures declined $1.15, or 1.76%, to $64.22 per barrel. November gasoline futures tumbled $0.0383, or 2.03%, to $1.8474 a gallon. November heating oil futures tanked $0.0565, or 2.45%, to $2.2453.

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