Natural Gas Turns Higher On Inventory Data, Rising Crude Prices

(RTTNews) - Natural gas prices turned higher on Thursday and moved away from a five-week low. August natural gas ended the day at $12.30 per million British thermal units, up 29.4 cents on the session. Prices touched as high as $12.442 as traders considered a rise in crude oil prices and natural gas inventory data.

Traders considered the weekly inventory report from the Energy Information Administration. Natural gas inventories were up 90 billion cubic feet to 2,208 bcf in the week ended July 4. Analysts were looking for a rise of about 100 bcf. Stocks were down 389 bcf from the year-ago pace and down 70 bcf from the five-year average. Stockpiles were up 85 billion cubic feet in the prior week.

Prices had dropped sharply in each of the last three sessions, including a 30.2 cent drop on Wednesday. That added to the recent slump as natural gas fell by more than $1 combined in Monday and Tuesday's sessions.

Oil soared on Thursday amid turmoil in the Middle East and moved above $141 a barrel again. Light sweet crude for August delivery ended the session at $141.65, up $5.60 on the session. Prices climbed as high as $142.08 and erased most of its sharp drop from earlier in the week.

On Thursday, Iran test-fired more missiles, a day after testing Shahab-3, a long- range missile capable of reaching Israel. Iran has said it will close the Strait of Hormuz, which is vital to crude oil distribution, if its nuclear facility is attacked. Meanwhile, a militant group in Nigeria has threatened to end a ceasefire.

Also, the International Energy Agency said Thursday that it expects world oil demand growth would slow slightly by 1.1% or 860,000 barrels per day (bpd) to 87.7 million bpd in next year, down from a growth of 890,000 bpd this year. It slightly lifted this year's forecast demand higher by 80,000 bpd or 0.9% to 86.9 million bpd.

On the economic front, the U.S. Department of Labor revealed that initial jobless claims dropped to 346,000 for the week ended July 5. This was down 58,000 from the previous week's revised figure. The announcement came as a surprise to most economists, who had generally expected a mild increase for the week.

Continuing claims, which measures the number of people receiving ongoing unemployment help, edged up for the week ended June 28, the most recent week for which the government has data. The measure was up 91,000 to a level of 3.2 million.