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Natural gas futures add to losses after supply data

Published 02/20/2014, 10:48 AM
Natural gas futures extend losses after supply data
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Investing.com - Natural gas futures extended losses on Thursday, after data showed that U.S. natural gas supplies fell less-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in March rose to a session high of $6.400 per million British thermal units, the most since December 4, 2008.

Nymex gas prices last traded at $5.917 per million British thermal units during U.S. morning hours, down 3.8%. Futures traded at $6.101 prior to the release of the supply data.

The March contract surged 10.77% on Wednesday to settle at $6.149 per million British thermal units.

Natural gas futures were likely to find support at $5.560 per million British thermal units, the low from February 19 and resistance at $6.400, the high from February 20.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended February 14 fell by 250 billion cubic feet, compared to expectations for a decline of 251 billion cubic feet.

Natural gas supplies fell by 127 billion cubic feet in the same week a year earlier.

Total U.S. natural gas storage stood at 1.443 trillion cubic feet. Stocks were 975 billion cubic feet less than last year at this time and 741 billion cubic feet below the five-year average of 2.184 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 364 billion cubic feet below the five-year average, following net withdrawals of 129 billion cubic feet.

Stocks in the Producing Region were 277 billion cubic feet below the five-year average of 806 billion cubic feet after a net withdrawal of 91 billion cubic feet.

Stockpiles of the fuel are likely to finish below 1 trillion cubic feet by the last week of March, the formal end of the winter heating season, for the first time since 2003.

Natural gas inventories have fallen sharply since November as frigid temperatures and heavy winter snow in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April dipped 0.15% to trade at $102.71 a barrel, while heating oil for March delivery added 0.35% to trade at $3.158 per gallon.

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