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Natural gas fall on bearish U.S. supply report

Published 02/06/2014, 01:33 PM
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Investing.com - Natural gas futures edged lower on Thursday after a weekly U.S. supply report disappointed investors, who were hoping a recent string of powerful winter storms took their toll on the nation's stockpiles.

On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD4.956 per million British thermal units during U.S. trading, down 1.48%. The commodity hit session high of USD5.393 and a low of USD4.929.

The March contract settled down 6.42% on Wednesday to end at USD5.030 per million British thermal units.

Natural gas futures were likely to find support at USD4.769 per million British thermal units, Monday's low, and resistance at USD5.734, Wednesday's high.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 31 fell by 262 billion cubic feet, missing expectations for a decline of 270 billion cubic feet.

Gas supplies fell by 129 billion cubic feet during the same week a year earlier.

Total U.S. natural gas storage stood at 1.923 trillion cubic feet. Stocks were 778 billion cubic feet less than last year at this time and 556 billion cubic feet below the five-year average of 2.479 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 312 billion cubic feet below the five-year average, following net withdrawals of 143 billion cubic feet.

Stocks in the Producing Region were 187 billion cubic feet below the five-year average of 889 billion cubic feet after a net withdrawal of 93 billion cubic feet.

Traders were hoping below-normal temperatures gripping much of the U.S. last week would have taken more of a toll on the country's inventories.

Updated weather forecasting models pressured prices lower as well.

While bitter cold weather may linger across the U.S. during the next several days, seasonably mild temperatures should settle in across much of the country from Feb. 15 to Feb. 19, with some pockets of the country seeing above normal temperatures.

Still, parts of the Midwest will see below-normal temperatures, which curbed the commodity's losses.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were up 0.14% and trading at USD97.52 a barrel, while heating oil for March delivery were down 0.19% and trading at USD2.9912 per gallon.

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