Investing.com - Natural gas futures traded lower Thursday, despite a report from the U.S. Energy Information Administration indicating inventories declined more than forecast last week.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.27 per million British thermal units during U.S. afternoon trade, giving back 0.50%.
It earlier fell by as much as 2.2% to trade at a session low of USD2.235 per million British thermal units. Prices fell to a ten-year low of USD2.208 on Tuesday.
The April contract traded at USD2.287 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 9 fell by 64 billion cubic feet, after declining by 80 billion cubic feet in the preceding week.
Analysts had expected U.S. natural gas storage to drop by 58 billion cubic feet.
Inventories fell by 60 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 79 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 2.369 trillion cubic feet as of last week. Stocks were 735 billion cubic feet higher than last year at this time and 807 billion cubic feet above the five-year average of 1.562 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 340 billion cubic feet above the five-year average, following a withdrawal of 55 billion cubic feet.
Stocks in the Producing Region were 361 billion cubic feet above the five-year average of 604 billion cubic feet, after a net withdrawal of 2 billion cubic feet.
Prices were under pressure before the supply data, as weather forecasts continued to point to mild weather across the U.S. throughout most of March.
Industry weather group MDA EarthSat said earlier in the week that high temperatures are forecast to last until almost April, capping off an abysmal heating season for the U.S. natural-gas market.
According to the National Oceanic and Atmospheric Administration, temperatures in the continental U.S. in December through February were the warmest since 2000.
The agency said that the number of heating-degree days, a measure of energy demand, was 11% below the 30-year average for the October to February period.
With less than two weeks to go in the U.S. winter, the surplus of natural gas in inventory is continuing to grow, keeping gas prices on the defensive until summer cooling loads kick in.
Futures have plunged almost 15% since the beginning of March and are down approximately 26% since the start of 2012 as market sentiment has been dominated by concerns over elevated U.S. storage levels and mild late-winter weather.
Market participants noted that April is considered a transition month for natural gas.
Futures contracts tend to trade more lightly during spring months because demand for heating is weak and natural gas-fueled power plants have yet to step up production to serve air conditioners.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April gave back 0.06% to trade at USD105.37 a barrel.