US natural gas futures stopped falling on Thursday and edged higher despite a report showing a storage build in line with expectations and forecasts for mild weather over the next two weeks. That small gain came after the front-month, which expired on Thursday, dropped about 20 percent into bear market territory over the past two weeks on concerns homes and businesses would not have to burn as much gas this winter.
The US Energy Information Administration said utilities added a near-normal 73 billion cubic feet of gas into storage during the week ended on October 21, matching analysts' consensus estimates in a Reuters poll. That compared with builds of 77 bcf in the prior week, 67 bcf a year earlier and a five-year average increase of 76 bcf.
After falling for six days in a row to the lowest in seven weeks on Wednesday, front-month gas futures for November delivery rose 3.3 cents, or 1.2 percent, to settle at $2.764 per million British thermal units. Traders noted most of the action on Thursday was in the new front-month contract, December, which ended up 3.2 cents, or 1 percent, at $3.068 per mmBtu. Despite the small gain, the front-month remained in technically oversold territory for the fourth straight day, its longest stretch since February.
Just two weeks ago, the contract was in overbought territory when it hit a 22-month high of $3.366 per mmBtu on October 13 as some weather forecasters called for this winter to be as cold as the 2014-2015 season, which was affected by a polar vortex. But analysts said speculators, producers and utilities had cut their long positions this week on concerns that homes and businesses would not have to burn as much gas as expected this winter, with unseasonably warm temperatures forecast to last into the second week of November.
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