Natural gas settles higher after US inventory data

Natural gas futures tilted higher off May 7 lows for the 11th session out of 16, after US data showed a slightly lower-than-expected inventory buildup, and following upbeat data from China, the world's largest energy importer. 

As of 07:50 GMT, natural gas futures due on September 15 rose 0.20% to $2.955 per million British thermal units, marking June 28 highs, while the dollar index powered up 0.47% to 95.54 against a basket of major rivals, marking July 17 highs. 

US Inventory Buildup 

The Energy Information Administration released its report on US natural gas inventories, showing another buildup of 46 billion cubic feet in the week ending August 3, adding to the 35B increase in the previous week, while analysts expected a 49B addition. 

Total stocks are now up to 2.354 trillion cubic feet from 2.308 trillion in the weekending July 27, which is below the total of the same period in 2017 at 3.025 trillion, while also below the five-year average at 2.926 trillion. 

Earlier data from China, the world's largest energy importer, showed consumer prices rose 2.1% y/y in July, a four-month high, up from 1.9% in June, and beating estimates of 2.0%, while producer prices rose 4.6%, slowing down from 4.7% and beating estimates of 4.4%. 

US Labor, Inflation Data 

Earlier US data showed producer prices were unchanged in July, compared to a 0.3% increase in June, and missing estimates of 0.2%. 

Core prices, excluding food and energy, rose 0.1%, while those excluding trade services as well rose 0.3%, indicating solid momentum in the economy. 

US unemployment claims fell surprisingly by 6 thousand to 213 thousand from 219K, beating expectations of an increase to 220K.

Continuing claims for the week ending July 28 rose 29 thousand to 1.755 million from 1.726 million, missing expectations of 1.730 million. 

The final reading for business inventories rose 0.1% in June, compared to no-change in in the preliminary reading, and improving from a 0.6% surge in May.

Accumulated inventories indicate poor demand and are considered a negative sign for the economy.