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Natural gas futures remain lower after U.S. supply data

Published 12/13/2012, 10:42 AM
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Investing.com - Natural gas futures were lower for the sixth consecutive day on Thursday, falling to the lowest level since late-September after a report from the U.S. Energy Information Administration showed natural gas supplies rose unexpectedly last week.

On the New York Mercantile Exchange, natural gas futures for delivery in January traded at USD3.357 per million British thermal units during U.S. morning trade, down 0.75% on the day.

It earlier fell by as much as 2% to trade at a session low of USD3.314 per million British thermal units, the weakest level since September 28.

The January contract traded at USD3.336 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 December 7 rose by 2 billion cubic feet, compared to expectations for a decline of 4 billion cubic feet.

Inventories fell by 79 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 113 billion cubic feet.

Total U.S. natural gas storage stood at 3.806 trillion cubic feet as of last week. Stocks were 48 billion cubic feet higher than last year at this time and 283 billion cubic feet above the five-year average of 3.523 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 42 billion cubic feet above the five-year average, following net withdrawals of 12 billion cubic feet.

Stocks in the Producing Region were 171 billion cubic feet above the five-year average of 1.114 billion cubic feet, after a net injection of 12 billion cubic feet.

Meanwhile, forecasts showing mild winter temperatures across most parts of the heavily populated U.S. Northeast in the next two weeks continued to dampen sentiment on the heating fuel.

The U.S. Northeast is a key gas-heating area. Mild winter temperatures reduce the need for gas-fired electricity to heat homes, reducing demand for natural gas.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Natural gas futures touched a 14-month high of USD4.001 per million British thermal units on November 26, amid expectations of a cold winter and an increase in heating demand.

But prices fell sharply after forecasters revised their weather outlooks for the period, saying early December temperatures should be warmer-than-normal.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January eased up 0.15% to trade at USD86.88 a barrel, while heating oil for January delivery added 0.3% to trade at USD2.976 per gallon.

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