NYMEX natural gas bearish demand supply report

Natural gas prices dropped on Thursday news that U.S. stockpiles rose more than expected last week. On the New York Mercantile Exchange, natural gas futures for delivery in November were down 2.30% at $3.931 per million British thermal units during U.S. trading. The commodity hit a session low of $3.908, and a high of $4.059. The November contract settled down 2.38% on Wednesday to end at $4.023 per million British thermal units. Natural gas futures were likely to find support at $3.845 per million British thermal units, the low from Sept. 24, and resistance at $4.184, Wednesday's high. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Sept. 26 rose by 112 billion cubic feet, above expectations for an increase of 107 billion, which sent prices falling. Inventories rose by 99 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 85 billion cubic feet. Injections of gas into storage have surpassed the five-year average for 24 consecutive weeks, alleviating concerns over tightening supplies. Total U.S. natural gas storage stood at 3.100 trillion cubic feet. Stocks were 373 billion cubic feet less than last year at this time and 399 billion cubic feet below the five-year average of 3.499 trillion cubic feet for this time of year. Uncertain weather forecasts added to the selloff. While a shot of colder air should move across the central and eastern U.S. in the coming days and drive demand for heating, uncertainty as to whether lower mercury readings will reach the eastern U.S. seaboard applied downward pressure on the commodity. "Weather models have been putting out a wide range of solutions, resulting in challenging temperature forecasts for the central and eastern U.S. This pattern would be more intimidating if slightly colder northern Canadian air was tapped, as well as if colder temperatures were more aggressive pushing into the Northeast coast," Natgasweather.com reported in its midday update on Thursday. "It will still be an overall chilly U.S. pattern as much of the northern and central U.S. will experience persistent intrusions of cooler Canadian air, but with the Northeast coast missing out on some of the coldest air, it won't be as intimidating as it could have been." Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November were up 0.40% at $91.09 a barrel, while heating oil for November delivery were down 0.38% at $2.6455 per gallon.