Natural-gas prices erased some losses but continued trading lower Thursday as weekly inventory data showed that stockpiles of the fuel fell more than expected but the market remains oversupplied.
Natural-gas futures for March delivery recently traded down 4.7 cents, or 2.4%, at $1.895 a million British thermal units on the New York Mercantile Exchange, up from as low as $1.866/mmBtu before the report’s release.
A growing oversupply of natural gas due to robust production and mediocre demand has weighed on prices this winter. Warmer-than-normal weather in the eastern U.S. has reduced the need for natural gas to heat homes and offices.
Stockpiles of natural gas fell by 158 billion cubic feet to 2.706 trillion cubic feet in the week ended Feb. 12, the Energy Information Administration said Thursday. Analysts surveyed by The Wall Street Journal had expected the agency to report a 154 bcf withdrawal.
The stockpile draw was smaller than the five-year average drain for the week of 170 bcf.
"The 158-bcf net withdrawal for last week was ...still somewhat bearish on a seasonally adjusted basis,” said Tim Evans, analyst at Citigroup Inc., in a note. "With forecasts for mild temperatures ahead, we’d also suspect that any upward price reaction off the storage report may prove short-lived.”
Inventories as of Feb. 12 stood 25% above levels from a year ago and 26% above the five-year average for the same week.
(Wall Street Journal)
