Natural gas prices surge nearly 4% despite a striding dollar index

Natural gas prices jumped nearly four percent in the American session despite the rising dollar index, following a spate of earlier data showing a big slowdown in GDP growth in the fourth quarter, while the goods trade balance deficit rose unexpectedly in November. Chicago PMI on the other hand surged the most in a year, while the Revised UoM Consumer Sentiment survey dropped more than expected in January. 

As of 06:38 GMT, natural gas futures due on March 16 jumped 3.90% to $2.267 per million British thermal units, compared to the opening price of $2.224, with an intraday high at $2.296, and a low at $2.218. 

The Energy Information Administration released it weekly report on natural gas stocks yesterday, 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 U.S. data showed a sharp slowdown in fourth quarter GDP to a growth of 0.7%, compared to 2.0% in third quarter, and analysts' expectations of 0.8%, while the Advance GDP Price Index rose 0.8% in fourth quarter, less than 1.3% in third quarter and expectations of a 1.2% growth. Additionally, Personal Consumption Expenditures Prices slowed down in fourth quarter to a growth of 2.2%, compared to 3.0% in third quarter, but is higher than forecasts of 1.8%, while Core Personal Consumption Expenditures rose 1.2%, in line with expectations and compared to 1.4% in the previous reading.

Also, the U.S. goods trade balance, which constitutes a third of the whole trade balance, recorded a deficit of $61.5 in November, missing the expectations of a $60.0 deficit, and compared to October's $60.3 deficit. Chicago PMI on the other hand soared 12.7 points in January, the biggest growth in a year, to 55.6 from 42.9 in December, much better than expectations of 45.4. 

The U.S. dollar index, which measures the greenback against a basket of rival currencies, soared to 99.70, compared to the opening of 98.66, with an intraday high at 99,83, and a low at 98.58. 

Finally, the Revised University of Michigan Consumer Sentiment survey showed a drop to 92.0 for January from the initial estimate of 93.3, missing forecasts of 93.1. December's reading was at 92.6. Other data in the survey showed another drop in economic conditions to 106.4 from 108.1 in December's reading, while economic expectations remained flat at 82.7. Similarly, inflation expectations for the coming year came at 2.5%, compared to 2.6% in December, while five-year expectations rose to 2.7% from 2.6% in December.