NEW YORK (AP) — Natural gas prices surged Thursday after a report showing a smaller than expected increase in U.S. supplies.
Futures rose 12 cents, or 4 percent, to $3.05 per 1,000 cubic feet Thursday in New York.
The Energy Information Administration reported that natural gas in storage grew by 24 billion cubic feet to 3.241 trillion cubic feet for the week ended Aug. 3.
Analysts expected a rise of 27 billion cubic feet to 31 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Still, energy analyst Stephen Schork believes that natural gas prices may be peaking as the summer winds down. "We are on the down slope of seasonal demand," Schork said in an emailed report.
Natural gas futures have increased about 62 percent since hitting a 10-year low in April because of the hot summer weather. July was the hottest month on record, according to government scientists.
Utilities are using the fuel to generate electricity to meet stronger demand from homes and businesses that are cranking up air conditioning. In addition, natural gas producers have cut back after a production boom created a glut of supply.
Natural gas inventories typically increase from April through October ahead of heavier demand for heat during the winter.
So far, the increase in inventories since April has been the smallest in 12 years. But the EIA still expects supplies to hit a record high of more than 3.9 trillion cubic feet by November.