Forexpros – Natural gas futures remained sharply lower on Thursday, amid lingering concerns over elevated inventory levels after the U.S. Energy Information Administration said that natural gas inventories declined less-than-expected last week.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD3.038 per million British thermal units during U.S. morning trade, tumbling 1.85%.
It earlier fell by as much as 3.6% to trade at a session low USD3.006 per million British thermal units.
The February contract traded at USD3.047 prior to the release of the U.S. Energy Information Administration report.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended December 30 fell by 76 billion cubic feet, after declining by 81 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 78 billion cubic feet.
Total U.S. natural gas storage stood at 3.472 trillion cubic feet as of last week. Stocks were 356 billion cubic feet higher than last year at this time and 458 billion cubic feet above the five-year average of 3.014 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 193 billion cubic feet above the five-year average, following net withdrawals of 62 billion cubic feet.
Stocks in the Producing Region were 499 billion cubic feet above the five-year average of 696 billion cubic feet, after a net withdrawal of 10 billion cubic feet.
Concerns that U.S. gas supplies are ample to meet the needs of even an unusually cold winter have kept prices depressed near 27-month lows in recent sessions.
The front-month gas contract settled below USD3.00 for the last two trading sessions, the first time it has done son in January in nearly a decade.
Gas futures typically climb during the winter months, as temperatures fall and demand for heating fueled by natural gas rises. But mild weather coupled with high production levels have kept prices depressed in recent weeks.