The U.S. Energy Department's weekly inventory release showed a smaller-than-expected increase in natural gas supplies following which the commodity traded up. Moreover, optimism over the fuel’s strong demand on the back of bullish weather predictions further spurred natural gas prices.About the Weekly Natural Gas Storage ReportThe Weekly Natural Gas Storage Report – brought out by the Energy Information Administration (EIA) every Thursday since 2002 – includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.Analysis of the Data: A Smaller-than-Expected Rise in StorageStockpiles held in underground storage in the lower 48 states rose by 57 billion cubic feet (Bcf) for the week ended July 7, 2017, below the guidance (of 59 Bcf gain) as per the analysts surveyed by S&P Global Platts, a leading independent commodities and energy data provider. Moreover, the increase was lower than both last year’s addition of 61 Bcf and the 5-year (2012-2016) average net injection of 72 Bcf for the reported week.This caused the current storage level – at 2.945 trillion cubic feet (Tcf) – narrow its surplus to the five-year average to 172 Bcf (6.2%), while stocks have now fallen 289 Bcf (8.9%) below the year-ago figure.The bullish build in natural gas inventories instilled optimism and prompted spurts of buying. As a result, the commodity spiked 4.1% for the week to end Friday at $2.98 per MMBtu. Apart from the EIA data, the electricity generation fuel also got a lift from investors who took note of hot weather predictions (translating into strong heating gas demand) for the week ahead.Positive Long-Term ThesisDespite occasional hiccups, the natural gas demand situation looks promising with hot conditions set to prevail in most U.S. pockets in the later part of July and power generators burning more gas to meet intensifying cooling demand.In any case, long-term fundamentals for the commodity continue to be supportive on the back of structural imbalances. While domestic natural gas production is expected to rebound this year, the growing use of liquefied natural gas (or LNG), booming exports to Mexico, replacing coal-fired power plants and higher demand from industrial projects will likely take care of the increased output. The resulting effect will ensure natural gas storage keeping pace with the 5-year average in the near future, with deficits piling up later on.Over the summer, these secular tailwinds are likely to support natural gas sentiment and price.Which Stocks to Bet OnThe perceived price strength augurs well for natural gas-heavy upstream companies like Rice Energy Inc. RICE, Chesapeake Energy Corp. CHK, Southwestern Energy Co. SWN, WPX Energy Inc. WPX, Cabot Oil & Gas Corp. COG and EQT Corp. EQT.However, each of these firms has a Zacks Rank #3 (Hold), which means that investors should preferably wait for a better entry point before buying shares in them.In case you are looking for natural gas names for your portfolio, one could opt for Cheniere Energy Inc. LNG. It has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.With domestic prices remaining constrained on the back of abundant supplies, the company sees a big opportunity in selling U.S. natural gas production at higher prices overseas. Houston, TX-based Cheniere Energy is the only liquefied natural gas exporter of the U.S. and plans to turn the commodity’s glut into export revolution, currently exporting to over 20 countries.The 2017 Zacks Consensus Estimate for this company is for a loss of 13 cents, representing some 93.1% earnings per share growth over 2016. Next year’s average forecast is 56 cents, pointing to another 514.8% growth.More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Southwestern Energy Company (SWN): Free Stock Analysis Report EQT Corporation (EQT): Free Stock Analysis Report Chesapeake Energy Corporation (CHK): Free Stock Analysis Report Cabot Oil & Gas Corporation (COG): Free Stock Analysis Report WPX Energy, Inc. (WPX): Free Stock Analysis Report Rice Energy Inc. (RICE): Free Stock Analysis Report Cheniere Energy, Inc. (LNG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research