Nat-Gas Prices Rally Amid Shrinking US Gas Surplus

Natural gas prices surged to a two-and-a-half-month high on Wednesday, closing up 1.96% at +0.058. The rally was driven by expectations of a shrinking US gas storage surplus.

The consensus is that Thursday's EIA nat-gas inventories for the week ended September 18 rose by +51 bcf, below the five-year average of +76 bcf. This should shrink the current surplus, which stands at 3.7% above the five-year seasonal average.

However, prices fell from their best level on Wednesday as cooler US weather forecasts reduced nat-gas demand from electricity providers to power air conditioning. The Commodity Weather Group said that forecasts shifted cooler, with normal seasonal weather expected across most of the US from September 28 to October 2.