Natural gas futures extend rally with supply data in focus

Natural gas futures rose more than 1% during U.S. morning trade on Wednesday, extending the previous session’s strong rally as market players looked ahead to a closely watched U.S. government report on natural gas supplies on Thursday, amid speculation the data could show the first withdrawal of the winter heating season.
Forecasts showing colder-than-normal temperatures across most parts of the U.S. in the coming week further supported the commodity.
On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.787 per million British thermal units during U.S. morning trade, climbing 1.3%.       
Earlier in the day, prices rose by as much as 1.75% to hit a session high of USD3.805 per million British thermal units, the strongest level since October 30.
Natural gas prices continued to draw support from expectations this Thursday’s storage data will show the first withdrawal of the U.S. heating season.
If so, it will be the earliest seasonal decline since 2007. The heating season from November through March is the peak demand period for U.S. gas consumption.
Early injection estimates range from a build of 15 billion cubic feet to a draw of 17 billion cubic feet, compared to last year's build of 20 billion cubic feet. The five-year average change for the week is an increase of 17 billion cubic feet.
Total U.S. gas supplies stood at 3.929 trillion cubic feet, an all-time record that surpasses the previous peak of 3.852 trillion cubic feet reached last November.
Stocks are 2.9% above a year ago and 6.6% above the five-year average for the week. In March, after an exceptionally warm winter, stockpiles were approximately 60% above average.
Meanwhile, updated weather forecasts released showed that cold weather was expected across most parts of the U.S. Southeast during the next five days.
The Commodity Weather Group said Tuesday that temperatures may be colder-than-normal across most of the eastern half of the U.S. through November 17.
Bullish speculators are betting on the colder weather increasing early-winter demand for the heating fuel.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January rose 1% to trade at USD86.69 a barrel, while heating oil for December delivery added 1% to trade at USD2.987 per gallon.