June 4 (Bloomberg) -- Natural gas futures rose in New York on speculation that demand will increase, after economic reports today indicated the recession is easing.
Gas advanced as initial jobless claims fell by 4,000 to 621,000 in the week ended May 30, according to the Labor Department. The number of people collecting unemployment insurance fell for the first time in five months. A recovery would lift gas demand from factories and power plants, which account for 58 percent of U.S. consumption.
“We know supply is high and demand is weak,” said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. “But we don’t know how strong the economy will rebound this summer. We’re playing into that economic optimism.”
Natural gas for July delivery climbed 4.8 cents, or 1.3 percent, to $3.814 per million British thermal units at 9:30 a.m. on the New York Mercantile Exchange. Futures have dropped 32 percent this year. Gas yesterday tumbled 8.6 percent, the biggest decline in two weeks.
Today’s gain is “partially in response to economic data and it’s partially in response to yesterday’s sell-off,” said Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in New Canaan, Connecticut.
A government report today is expected to show that natural gas inventories gained 115 billion cubic feet in the week ended May 29, according to the median of 19 analyst estimates compiled by Bloomberg. The five-year average change is an increase of 94 billion. Supplies in last week’s report were 22 percent above normal.
The report “is going to be watched perhaps a lot more closely than some of the ones in the past because it does seem so very, very important to this market in terms of what it’s going to do over the immediate term,” Beutel said
