Forexpros – Natural gas futures added to losses in thin trade on Thursday, trading close to the lowest level since September 2009 after the U.S. Energy Information Administration said that natural gas inventories declined less-than-expected last week, underlining concerns over elevated inventory levels.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD3.077 per million British thermal units during U.S. morning trade, tumbling 1.35%.
It earlier fell by as much as 1.9% to trade at USD3.067 per million British thermal units, the lowest since December 19, when prices fell to a 27-month low of USD3.050.
The February contract traded at USD3.106 prior to the release of the U.S. Energy Information Administration report.
Trading volumes remained light before the New Year’s holiday weekend, as many traders have closed books before the end of the year, reducing liquidity in the market and increasing volatility.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended December 23 fell by 81 billion cubic feet, after declining by 100 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 89 billion cubic feet. Stocks fell by 143 billion cubic feet the same week a year earlier, while the five-year average change for the week is a drop of 122 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 3.548 trillion cubic feet as of last week, hovering below the all-time high of 3.852 trillion cubic feet it hit in November.
Stocks were 297 billion cubic feet higher than last year at this time and 428 billion cubic feet above the five-year average of 3.120 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 186 billion cubic feet above the five-year average, following net withdrawals of 53 billion cubic feet.
Stocks in the Producing Region were 216 billion cubic feet above the five-year average of 989 billion cubic feet, after a net withdrawal of 9 billion cubic feet.
The January natural gas contract has lost nearly 15% since the beginning of December, trading close to a 27-month low in recent sessions, as record high storage levels in the U.S. and forecasts of warm December weather drove down prices.
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.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February fell 0.65% to trade at USD98.72 a barrel, while heating oil for February delivery added 0.35% to trade at USD2.911 per gallon.
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