Natural gas rallies 2% past $3 after US inventory data

Natural gas futures rallied over 2% in American trade to January 31 highs after earlier US data showed a lower-than-expected inventory buildup last week. 

As of 07:58 GMT, natural gas futures due in October surged 2.52% to $3.06 per million British thermal units, while the dollar index spiked 0.78% to 94.93 away from July 9 lows. 

US Inventory Build 

The Energy Information Administration released its report on US natural gas storage, showing a buildup of 46 billion cubic feet in the week ending September 21, adding to the 86 billion increase in the previous week, while analysts expected a 64B addition. 

Total stocks rose to 2.768 trillion cubic feet from 2.722 trillion in the week ending September 14, which is below the total of the same period in 2017 at 3.458 trillion, while also below the five-year average at 3.389 trillion. 

US Growth, Labor, Trade Data 

Other US data showed the final reading for GDP growth at 4.2% as expected for the second quarter, up from 2% in the first, while GDP prices rose 3.0% as expected, up from 2.2% in the first quarter. 

Durable goods orders rose 4.5% in August, compared to a 1.2% drop in July, and beating estimates of a 1.9% increase. 

Unemployment claims rose 12 thousand in the week ending September 22 to 214 thousand, above estimates of 208 thousand, while continuing claims rose 16 thousand in the week ending September 15 to 1.661 million. 

US goods trade deficit widened to $75.8 billion from $72 billion, missing estimates of $70.6 billion, while wholesale inventories rose 0.8%, adding to a 0.6% increase in July. 

US pending home sales fell 1.8% m/m in August, compared to a 0.8% increase in July, while analysts expected only a 0.2% dip. 

On a yearly basis, sales fell 2.5%, compared to a 0.7% drop in July, while analysts expected a 1% fall. 

The Federal Open Market Committee voted at the September 25-26 meeting to increase overnight interest rates by 25 basis points for the third time this year to just below 2.25%, as expected by analysts. 

The Federal Reserve has been gradually increasing rates since late 2015 from near zero levels as the economy continued to expand and inflation picked up pace.