Natural gas backs off week high on US inventory build

Natural gas futures fell nearly one percent in American trade away from September 4 highs, after US data showed another large inventory build for the 19th week in a row. 

As of 07:58 GMT, natural gas futures due in October fell 0.67% to $2.81 per million British thermal units, while the dollar index fell 0.26% to 94.55, marking six-week lows. 

US Inventory Buildup 

The Energy Information Administration released its report on US natural gas inventories, showing a buildup of 69 billion cubic feet in the week ending September 7, adding to the 63 billion increase in the previous reading, while analysts expected a 65 billion build. 

Total stocks are now up to 2.636 trillion cubic feet from 2.567 trillion in the week ending August 31, which is below the total of the same period in 2017 at 3.298 trillion, while also below the five-year average at 3.232 trillion. 

US Inflation, Labor Data  

Earlier US data showed consumer prices rose 0.2% m/m in August, same as July, while core prices rose 0.1%, slowing down from 0.2%. 

On a yearly basis, consumer prices rose 2.7%, slowing down from 2.9%, while core prices slowed down as well to 2.2% from 2.4%. 

Unemployment claims fell a thousand in the week ending September 8 to 204 thousand, while continuing claims fell 15 thousand to 1.696 million.

US President Donald Trump tweeted earlier today: "we are under no pressure to make a deal with China, they are under pressure to make a deal with us. Our markets are surging, theirs are collapsing. We will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?", weighing on silver and other metal prices. 

Conversely, China's foreign ministry welcomed the prospect of US officials arriving in Beijing to discuss the trade issues, in turn buoying market sentiment.