Investing.com - Natural gas futures plunged to a 32-month low on Thursday, after data showed that U.S. natural gas supplies fell less than forecast last week, underlining concerns over weak demand.
On the New York Mercantile Exchange, natural gas for delivery in March tumbled to a session low of $2.584 per million British thermal units, a level not seen since June 2012, before trading at $2.598 during U.S. morning hours, down 6.5 cents, or 2.42%. Prices were at $2.625 prior to the release of the supply data.
Futures were likely to find support at $2.575 per million British thermal units, the low from June 22, 2012, and resistance at $2.779, the high from February 4.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 30 fell by 115 billion cubic feet, compared to expectations for a decline of 121 billion. Natural gas storage in the U.S. fell by 94 billion cubic feet in the preceding week.
Inventories fell by a whopping 259 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 165 billion cubic feet.
Total U.S. natural gas storage stood at 2.428 trillion cubic feet. Stocks were 468 billion cubic feet higher than last year at this time and 29 billion cubic feet below the five-year average of 2.457 trillion cubic feet for this time of year.
A day earlier, natural gas lost 9.2 cents, or 3.34%, to settle at $2.662 after extended weather forecasting models showed that below-normal temperatures may give way to higher readings by the middle of February, dampening demand expectations for the heating fuel.
Bearish speculators are betting on the near-normal weather reducing winter demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Nymex natural gas prices sank 16.7 cents, or 9.03%, last week, capping the ninth weekly decline in the past ten weeks. Prices of the heating fuel plunged 15.9 cents, or 7.08%, in January, as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in March rallied $2.42, or 4.99%, to trade at $50.88 a barrel, while heating oil for March delivery jumped 2.24% to trade at $1.809 per gallon.