Forexpros – Natural gas futures plunged again on Thursday, trading at the lowest level since March 2002 as concerns over elevated inventory levels lingered after the U.S. Energy Information Administration said that natural gas inventories declined modestly last week.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD2.383 per million British thermal units during U.S. morning trade, plunging 3.6%.
It earlier fell by as much as 4.9% to trade at USD2.363 per million British thermal units, the lowest since March 2002.
The February contract traded at USD2.423 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 January 13 fell by 87 billion cubic feet, after declining by 95 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 88 billion cubic feet.
The drawdown was significantly lower than the 228 billion cubic feet withdrawn in the same week a year earlier. The five-year average change for the week is a decline of 162 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 3.290 trillion cubic feet as of last week. Stocks were 539 billion cubic feet higher than last year at this time and 566 billion cubic feet above the five-year average of 2.724 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 224 billion cubic feet above the five-year average, following a modest withdrawal of 61 billion cubic feet.
Stocks in the Producing Region were 276 billion cubic feet above the five-year average of 888 billion cubic feet, after a net withdrawal of 15 billion cubic feet.
Winter temperatures in the U.S. have yet to reach levels cold enough to boost demand for the heating fuel, keeping prices depressed at unseasonably low levels in recent weeks.
This is typically the coldest time in winter, but forecasts into early February show mostly above normal temperatures for most of the U.S. Industry weather group WSI called for “above and much above normal temperatures over most of the country next week.”
Natural gas prices have plunged nearly 34% since the beginning of December. So far in January, prices are approximately 50% lower than a year ago. The natural gas contract has not been this cheap at this time of year since 2002.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March rose 0.77% to trade at USD101.53 a barrel, while heating oil for February delivery gained 0.7% to trade at USD3.034 per gallon.
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