Natural gas rallies 4% past $3 on US inventory deficit

Natural gas futures rallied 4% in American trade off September 18 lows, while still marking the second weekly profit in a row, as the dollar index fell off June 2017 highs. 

That comes following a stream of data from the US, the world's largest energy consumer, including the EIA report that showed an inventory drawdown, while China's trade ministry announced talks with the US on trade on December 7-8. 

As of 08:25 GMT, natural gas futures due in February rose 2.85% to $3.03 per million British thermal units, while the dollar index inched down 0.11% to 96.17 off 1-1/5 year highs. 

Earlier US data showed the unemployment rate rose to 3.9% in December from 3.7% in November, which was the lowest since 1969, while analysts expected no change. 

US average hourly earnings rose 0.4% in December, beating estimates of 0.3% and up from 0.2% in November. 

The US economy added 312 thousand new jobs in December, the fastest such pace since February 2018, and beating estimates of 179K, and compared to November's 176K, revised from 155K. 

Federal Reserve Chair Jerome Powell participated in a panel discussion titled "Federal Reserve chairs: Joint Interview" at the American Economic Association's Annual Meeting, in Atlanta, while Congress passed bills to end the partial government shutdown starting two weeks ago, in order to fund several federal agencies until February 8. 

US Inventories 

The Energy Information Administration reported a deficit of 20 billion cubic feet in the week ending December 28 in US natural gas stocks, compared to a 48B drop in the previous week, while analysts expected a 43 billion decline. 

Total stocks are down to 2.705 trillion cubic feet from 2.725 trillion in the week ending December 21, making them below the total of the same period in 2017 at 3.155 trillion, while also below the five-year average at 3.265 trillion.