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Natural gas futures surged over 12 percent on Thursday, topping $2.46 per million British Thermal Units (BTUs), after an unexpectedly bullish storage report helped prices rally above key technical levels.
This price spike — to the highest level in more than a week — has now erased nearly half of the decline in natural gas prices over the past six weeks.
Traders say a government report of smaller-than-expected increase in storage levels has led to renewed focus on power demand, causing market participants to cover short positions as well as enticing some buyers."This was an extremely big surprise," said NYMEX floor trader John Woods. "Now you re-evaluate the trade."
The U.S. Energy Department reported natural gas in storage increased by 67 billion cubic feet (BCF) last week, less than the consensus estimate of 71 to 75 BCF, based on a Platts survey of analysts.
Analysts expectations ranged from injections of 59 to 85 BCF, according to Platts. Last year storage level built by 72 BCF — the five-year average, for this week of the year, is about 99 BCF.
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