Natural gas futures down more than 1% after storage data

Investing.com - Natural gas futures declined on Thursday, after data showed that U.S. natural gas supplies fell less than the five-year average for this time of year last week, underlining concerns over weak demand.

On the New York Mercantile Exchange, natural gas for delivery in March lost 3.0 cents, or 1.06%, to trade at $2.802 per million British thermal units during U.S. morning hours. Prices were at around $2.832 prior to the release of the supply data.

Futures were likely to find support at $2.697 per million British thermal units, the low from February 17, and resistance at $2.896, the high from February 17.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended February 13 fell by 111 billion cubic feet, compared to expectations for a decline of 108 billion.

Natural gas storage in the U.S. fell by 160 billion cubic feet in the preceding week. The five-year average change for the week is a decline of 180 billion cubic feet, while supplies fell by a whopping 247 billion the same time last year.

Total U.S. natural gas storage stood at 2.157 trillion cubic feet. Stocks were 678 billion cubic feet higher than last year at this time and 58 billion cubic feet above the five-year average of 2.099 trillion cubic feet for this time of year.

A day earlier, natural gas surged 7.2 cents, or 2.61%, to settle at $2.831 as investors focused on near-term weather forecasts, which showed frigid temperatures across most parts of the U.S. Northeast in the coming days.

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

Despite recent gains, natural gas prices are likely to remain vulnerable amid speculation supplies are more than ample to meet demand.

Futures are down almost 40% since mid-November as an unusually mild start to winter limited demand while production soared.

Elsewhere on the Nymex, crude oil for delivery in April plunged $2.27, or 4.3%, to trade at $50.55 a barrel, while heating oil for March delivery shed 0.76% to trade at $1.944 per gallon.