Natural-gas prices shot higher Wednesday, as some investors locked in profits on bearish bets a day ahead of weekly inventory data.
Natural gas for September delivery was recently up 5.5% at $2.252 per million British thermal units. Prices hit their lowest level in more than three years earlier this week.
Prices have plummeted this summer, as bountiful supplies outweighed demand from electricity power plants for gas needed to power air conditioners in the wake of a heat wave that hit the Eastern U.S. earlier this month.
Global natural-gas consumption grew by an estimated 4.6% in 2018, according to the International Energy Agency. Yet supplies have been plentiful, with producers in West Texas getting natural gas as a byproduct of their oil drilling.
Hedge funds and other speculative investors have pushed net bearish bets on natural-gas prices to their highest level since November 2015, Commodity Futures Trading Commission data showed, with bearish wagers by speculators outnumbering bullish ones by 184,231 contracts in the week ended July 23.
The Energy Information Administration will release its weekly natural gas storage report on Thursday.
Meanwhile, U.S. oil prices were recently up 0.3% at $58.22 a barrel after EIA data on Wednesday showed U.S. inventories of crude oil fell sharply last week, while stockpiles of gasoline and other fuels also declined.
Crude-oil stockpiles declined by 8.5 million barrels to 436.5 million barrels, and now are precisely at the five-year average for this time of year, the EIA said.
Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would fall by 2.1 million barrels from the prior week.
Prices for Brent, the global benchmark, were up 0.7% to $65.07 a barrel.
In precious metals, gold was down 0.3% at $1,437.50 a troy ounce as investors awaited the conclusion of the Federal Reserve’s monetary policy meeting Wednesday afternoon.
While most market participants expect the central bank to announce a 25-basis-point interest rate cut, indications of more easing to come could be bullish for gold, which struggles to compete with yield-bearing assets when rates rise.
Write to Ira Iosebashvili at firstname.lastname@example.org and Dan Molinski at Dan.Molinski@wsj.com
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