Natural gas prices dip as market digests bearish U.S. supply report

           Natural gas prices fell on Thursday after official U.S. data revealed that supplies rose more than expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.589 per million British thermal units during U.S. trading, down 0.87%. 

The commodity hit a session low of USD3.564 and a high of USD3.659.

The December contract settled down 0.25% at USD3.620 per million British thermal units on Wednesday.

Futures were likely to find support at USD3.557 per million British thermal units, the low from Oct. 24, and resistance at USD3.869, the high from Oct. 16.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Oct. 25 rose by 38 billion cubic feet, higher than forecasts for an increase of 36 billion cubic feet.

Inventories rose by 66 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 57 billion cubic feet.

Total U.S. natural gas storage stood at 3.779 trillion cubic feet. Stocks were 120 billion cubic feet less than last year at this time and 58 billion cubic feet above the five-year average of 3.721 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 91 billion cubic feet below the five-year average, following net injections of 17 billion cubic feet. 

Stocks in the Producing Region were 102 billion cubic feet above the five-year average of 1.161 billion cubic feet after a net injection of 18 billion cubic feet.

Prices continued to come under pressure after updated weather-forecasting models called for mild temperatures to hover in place of the central and eastern U.S. for the next 10 days.

Milder temperatures cut into the need for heating or air conditioning this time of year, lowering demand for natural gas at the nation's thermal power generators.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were down 0.47% and trading at USD96.32 a barrel, while heating oil for December delivery were down 0.80% and trading at USD2.9529 per gallon.