Investing.com - Natural gas futures plunged Thursday, following a report from the U.S. Energy Information Administration indicating the third consecutive seasonal injection of natural gas for the year, underlining concerns over elevated U.S. supply levels.
On the New York Mercantile Exchange, natural gas futures for delivery in May traded at USD2.09 per million British thermal units during U.S. afternoon trade, plunging 2.24%.
The May contract traded at USD2.138 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 March 30 rose by 42 billion cubic feet, after increasing by 57 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to rise by 34 billion cubic feet.
Inventories fell by 29 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 8 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 2.479 trillion cubic feet as of last week. Stocks were 887 billion cubic feet higher than last year at this time and 934 billion cubic feet above the five-year average of 1.545 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 425 billion cubic feet above the five-year average, following a net injection of 11 billion cubic feet.
Stocks in the Producing Region were 401 billion cubic feet above the five-year average of 644 billion cubic feet, after a net injection of 26 billion cubic feet.
Prices wavered between small gains and losses ahead of the data as traders braced for the government's weekly survey amid extended forecasts for slightly cooler weather.
Weather service provider AccuWeather said that it expects temperatures in the U.S. Northeast to average above normal for the next five days, then cool to slightly below normal by early next week.
Market participants also noted some very warm temperatures in Texas and across the South this week have stirred some cooling demand.
Market analysts expect prices to continue their downtrend, eventually testing the USD2.00-level amid ongoing concerns over elevated U.S. storage levels and indications demand for the heating fuel will remain weak in the near-term.
The U.S. gas market is entering the so-called shoulder season. Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.
Gas stockpiles are expected to continue rising through the next few months as demand weakens.
Natural gas was the worst performing commodity of the first three months of 2012, plummeting 29% during the period, its worst quarterly loss in two years.
Futures plunged 19% in March, the biggest monthly drop since August 2010.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in May rocketed 1.64% to trade at USD103.15 a barrel
NYMEX electronic and floor trading will be closed on Friday for the Good Friday holiday.