Natural gas prices rise on bigger storage draw, dollar's tumble

Natural gas prices edged up in American trade after the EIA weekly report on storage volumes showed a bigger draw compared to the previous reading, while the U.S. dollar index stumbled following a host of data, which showed a massive drop in durable goods orders in December, while unemployment claims dropped more than expected. Related to that, pending homes sales missed forecasts in December. 

As of 05:59 GMT, natural gas futures due on March 16 rose 0.42% to $2.166 per million British thermal units, compared to the opening of $2.145, with an intraday high at $2.170, and a low at $2.1088. The gains come on the heals of the Energy Information Administration's weekly report on natural gas stocks, showing a draw of 211 billion cubic feet in the week ending January 22, compared to 178 billion in the previous reading, and slightly lower than analysts' expectations of a 215 billion draw. 

The report showed a storage total of 3.086 trillion cubic feet, lower than the previous week's 3.297 trillion, but still higher than how it was the previous year at 2.556 trillion, and also higher than the five-year average of 2.654 trillion. 

Earlier data showed that initial unemployment claims for the week ending January 23 fell to 278K from 294K the previous week, which is better than analysts' expectations of 281K. Continuing claims on the other hand rose to 2.268 million from 2.219 million in the previous reading, worse than expectations of 2.224 million. 

Similarly, Durable Goods orders tumbled 5.1% m/m in December, the biggest drop since August 2014, and compared to analysts' expectations of just a 0.6% slip and November's 0.5% fall. Core Goods, which exclude volatile transportation items, fell 1.2%, compared to no-change in November, and worse than expectations of a 0.1% dip. 

Tomorrow, a preliminary GDP reading will be released regarding fourth quarter, which is likely to show a drop in growth from 2.0% in third quarter to 0.8%, while earlier today, U.S. pending home sales rose 0.1% m/m in December, compared to a drop of 1.1% in November, and analysts' expectations of a 1.0% rise. On a yearly basis, sales rose 3.1%, missing the forecasts of 4.8%, and compared to November's yearly 4.8% growth.