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Natural gas futures plunge 5% after U.S. supply report

Published 05/02/2013, 10:47 AM
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Investing.com - Natural gas futures plunged to a one-week low on Thursday, adding to losses after a report from the U.S. Energy Information Administration showed natural gas supplies rose more-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD4.130 per million British thermal units during U.S. morning trade, down 4.5% on the day.       

Nymex gas prices fell by as much as 5% earlier in the day to hit a session low of USD4.103 per million British thermal units, the weakest level since April 26.

The June contract traded at USD4.290 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 April 26 rose by 43 billion cubic feet, above expectations for an increase of 28 billion cubic feet.

Inventories rose by 31 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 67 billion cubic feet.

Total U.S. natural gas storage stood at 1.777 trillion cubic feet as of last week. Stocks were 795 billion cubic feet less than last year at this time and 118 billion cubic feet below the five-year average of 1.895 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 120 billion cubic feet below the five-year average, following net injections of 18 billion cubic feet.

Stocks in the Producing Region were 52 billion cubic feet below the five-year average of 786 billion cubic feet after a net injection of 20 billion cubic feet.

Nymex gas prices have risen sharply in recent weeks, gaining almost 35% since mid-February, boosted by calls for colder temperatures in major consuming regions across the U.S. that helped tighten the market.

Gas futures rose to USD USD4.442 per million British thermal units on Wednesday, the strongest level since July 22, 2011.

Still, some analysts have warned that further gains may be limited with spring's low-demand shoulder season looming.

The heating season from November through March is the peak demand period for U.S. gas consumption. Nearly 50% of all U.S. households use gas for heating.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June added 0.8% to trade at USD91.75 a barrel, while heating oil for June delivery rose 0.9% to trade at USD2.813 per gallon.

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