Oct. 21 (Bloomberg) -- Natural gas futures dropped to the lowest price in 13 months after a government report showed that U.S. inventories rose more than expected last week.
Gas stockpiles increased 93 billion cubic feet in the week ended Oct. 15 to 3.683 trillion, the Energy Department said today. Analyst estimates compiled by Bloomberg before the report showed an expected gain of 89 billion. A survey of Bloomberg users showed an increase of 86 billion cubic feet.
“There is lots of gas in storage and demand is stagnant,” said Martin King, an analyst at FirstEnergy Capital Corp. in Calgary.
Natural gas for November delivery fell 15 cents, or 4.2 percent, to $3.389 per million British thermal units at 10:59 a.m. on the New York Mercantile Exchange. Prices touched $3.372, the lowest intraday price since Sept. 16, 2009. Gas traded at $3.491 before the report was released at 10:30 a.m.
The $2.4 billion U.S. Natural Gas Fund fell as low as $5.39 a share, the lowest since it began trading in April 2007.
Last week’s storage increase was bigger than the five-year average gain for the week of 54 billion cubic feet, department data show. A surplus to the five-year average rose to 8.4 percent from 7.4 percent the previous week. A deficit to year- earlier supplies narrowed to 1.3 percent from 3.2 percent.
Inventories will peak at 3.726 trillion cubic feet by the end of this month, the second-highest level ever for the start of a heating season, according to department estimates. Stockpiles climbed to a record 3.837 trillion cubic feet last November before cooler weather spurred demand for the heating fuel and began to reduce supplies.
Rig Total
The number of U.S. gas drilling rigs totaled 966 last week, 34 percent higher than a year earlier, according to data from Houston-based Baker Hughes Inc.
Gas output will average 61.29 billion cubic feet a day this year, the most since 1973, the Energy Department estimated in its monthly Short-Term Energy Outlook on Sept. 13.
The National Oceanic and Atmospheric Administration expects the lower 48 states to be 3 percent warmer this winter than a year earlier.
Fifty-two percent of U.S. households use natural gas for heating, according to the Energy Department