Natural gas futures surge after U.S. storage withdrawal

Forexpros - Natural gas futures extended gains on Thursday, rallying to a three-day high after the U.S. Energy Information Administration said that natural gas inventories declined more-than-expected last week. On the New York Mercantile Exchange, natural gas futures for delivery in January traded at USD3.515 per million British thermal units during U.S. morning trade, soaring 2.75%. It earlier rose by as much as 2.97% to trade at USD3.534 per million British thermal units, the highest since December 5. The January contract traded at USD3.454 prior to the release of the U.S. Energy Information Administration report. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended December 2 fell by 20 billion cubic feet, after declining by 1 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to drop by 10 billion cubic feet. Supplies declined by 79 billion cubic feet in the same week a year earlier, while the five-year average change is a drawdown of 66 billion cubic feet.Total U.S. natural gas storage stood at 3.831 trillion cubic feet as of last week, hovering below the all-time high of 3.852 trillion cubic feet it hit in November.Stocks were 102 billion cubic feet higher than last year at this time and 307 billion cubic feet above the five-year average of 3.524 trillion cubic feet for this time of year.The report showed that in the East Region, stocks were 96 billion cubic feet above the five-year average, following net withdrawals of 16 billion cubic feet. Stocks in the Producing Region were 169 billion cubic feet above the five-year average of 1.087 trillion cubic feet, after a net withdrawal of 5 billion cubic feet. U.S. gas supplies declined for the second consecutive week, fuelling speculation the peak heating demand season in the U.S. was underway.Prices have been under pressure in recent weeks as mild weather in key gas-consuming regions in the U.S. limited early-season heating demand. Meanwhile, Wall Street investment bank Goldman Sachs cut its 2012 average natural gas price forecast to USD3.70 per million British thermal units, down from a previous estimate of USD4.25, citing "strong expected growth in shale gas production." Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January tumbled 1.65% to trade at USD98.81 a barrel, while heating oil for January delivery slumped 0.8% to trade at USD2.958 per gallon.
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