Forexpros – Natural gas futures plunged on Thursday, falling to a fresh 28-month low for the third consecutive day 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 USD2.695 per million British thermal units during U.S. morning trade, plunging 2.87%.
It earlier fell by as much as 3.46% to trade at USD2.677 per million British thermal units, the lowest since September 8, 2009.
The February contract traded at USD2.731 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 6 fell by 95 billion cubic feet, after declining by 76 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 87 billion cubic feet.
The drawdown was significantly lower than the 137 billion cubic feet withdrawn in the same week a year earlier. The five-year average change for the week is a decline of 128 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 3.377 trillion cubic feet as of last week. Stocks were 398 billion cubic feet higher than last year at this time and 491 billion cubic feet above the five-year average of 2.886 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 194 billion cubic feet above the five-year average, following net withdrawals of 76 billion cubic feet.
Stocks in the Producing Region were 241 billion cubic feet above the five-year average of 938 billion cubic feet, after a net withdrawal of 16 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 28-month lows in recent sessions.
On Wednesday, natural gas prices posted their biggest one-day decline in eight months as revised forecasts showed milder weather across much of the U.S. through late January, reducing demand for the heating fuel.
Prices have dropped by more than 11% in the past week, including a plunge of almost 6% on Wednesday. So far in January, natural gas is about 34 percent lower than a year ago. It hasn’t been this cheap at this time of year since 2002.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February jumped 1.3% to trade at USD102.20 a barrel, while heating oil for February delivery rallied 1.45% to trade at USD3.109 per gallon.
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