Nat Gas Storage Grows; Oil Futures Rise

NEW YORK (TheStreet) -- Natural gas futures fluttered after the government reported a storage buildup that outdistanced expectations, while crude oil futures tracked higher helped by more hopeful demand figures and surging stocks.

Natural gas storage levels in the lower 48 states rose by a larger-than-expected 99 billion cubic feet last week, according to an Energy Information Administration report released Thursday. Meanwhile, a poll of analysts conducted by Platts showed they expected stocks to rise by 91 billion to 95 billion cubic feet.

With stocks at 2.456 trillion cubic feet, storage levels now stand 1.2% higher than levels from a year ago, and 14.4% above the five-year average.

On the Nymex, natural gas for July delivery edged lower after of the report but has since recovered. The contract was adding 3 cents at $4.71 per million British thermal units.

The July crude oil contract was also improving $1.12 to trade at $75.50 a barrel, and reached as high as $76.30 a barrel during the session, helped by a number of factors. Several news outlets cited Chinese trade data and the International Energy Agency's upwardly revised oil demand projections as giving support to prices Thursday. In its June oil market report, the IEA upped this year's demand forecasts to 86.4 million barrels day, or an increase of 60,000 barrels a day.

A reinforced euro and a waning dollar, who's dollar index was trading 0.9% against a collection of currencies, was probably underlying the oil rally as well.

Darin Newsom, senior energy analyst at Telvent DTN, said surging equities were also lending a hand to commodities, though he believes oil's march higher could be short-lived at a few days.

"We have seen some commercial buying coming in of late," said Newsom, saying resistance testing at $76 a barrel Thursday could open further testing just below the $80 mark, though the price is likely to retreat after that. "There's nothing really surprising about this, until we see a dramatic change to the underlying fundamentals."

Reverberations from the BP(BP) oil spill roiled oil-related stocks on Wednesday. But the energy realm was rebounding and leading the indices' advancers Thursday. The NYSE Arca oil index was climbing 3.6% higher and the Philadelphia Oil Service Sector index was surging 4.2%.