Forexpros – Natural gas futures turned lower on Thursday, retreating from a three-week high despite a report from the U.S. Energy Information Administration showed that natural gas inventories declined more-than-expected last week.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.740 per million British thermal units during U.S. morning trade, tumbling 1.28%.
It earlier fell by as much as 1.75% to trade at a session low of USD2.723 per million British thermal units.
The April contract traded at USD2.797 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 February 17 fell by 166 billion cubic feet, after declining by 127 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 146 billion cubic feet.
Inventories fell by 102 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 145 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 2.595 trillion cubic feet as of last week. Stocks were 753 billion cubic feet higher than last year at this time and 744 billion cubic feet above the five-year average of 1.851 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 300 billion cubic feet above the five-year average, following a withdrawal of 97 billion cubic feet.
Stocks in the Producing Region were 343 billion cubic feet above the five-year average of 650 billion cubic feet, after a net withdrawal of 58 billion cubic feet.
Market participants attributed the decline to profit-taking after futures rose on Wednesday amid expectations for a large supply drop.
Meanwhile, prices were expected to remain under pressure in the near-term after the Commodity Weather Group said that March was forecast to be 13.5% warmer than March of last year.
The private forecaster said it sees milder-than-usual temperatures across virtually the entire eastern half of the U.S. in March, with much of the warmth focused on the Midwest, a major gas-consuming region.
Milder-than-usual temperatures have weighed on natural gas prices all winter, sending prices to 10-year lows.
Winter so far in the U.S. has been the second mildest since 1950. It is running about 13% warmer than the 30-year normal, according to recent data from MDA EarthSat.
Last winter at this time, cold weather conditions led to a decline of more than 1.9 trillion cubic feet from U.S. storage to help meet the surge in heating demand.
In contrast, only 1.1 trillion cubic feet of storage gas has been burned this winter season, a 42% drop.
Most analysts now expect gas inventories to end the winter at a record high 2.215 trillion cubic feet, 43% above the five-year average.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April shed 0.2% to trade at USD106.08 a barrel, while heating oil for March delivery rose 0.25% to trade at USD3.280 per gallon.
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