Investing.com - U.S. natural gas futures turned lower in North American trade on Thursday, reversing gains after data showed U.S. natural gas supplies in storage fell broadly in line with market expectations last week.
Natural gas for delivery in April on the New York Mercantile Exchange shed 1.6 cents, or 0.91%, to trade at $1.736 per million British thermal units by 15:35GMT, or 10:35AM ET. Prices were at around $1.788 prior to the release of the supply data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended March 4 declined by 57 billion cubic feet, in line with expectations.
That compares with draws of 48 billion cubic feet in the prior week, 43 billion cubic feet in the same week last year and a five-year average of around 71 billion.
Total U.S. natural gas storage stood at 2.479 trillion cubic feet, 36.8% higher than levels at this time a year ago and 29.4% above the five-year average for this time of year.
Some market experts worry there may be too much gas left in storage at the end of March when utilities traditionally start injecting the fuel back into storage for the next winter.
A day earlier, natural gas futures advanced 4.0 cents, or 2.34%, as traders closed out bets on lower prices after futures held above key support levels.
Futures are up nearly 8% since falling to $1.611 last Friday, a level not seen since August 1998, as a failure to break below $1.610 prompted market players to cover short positions amid bullish chart signals.
Meanwhile, updated weather forecasting models continued to call for much warmer-than-normal weather through the middle of March, dampening late-winter heating demand. The above-average weather is expected to continue through most of the month.
The heating season from November through March is the peak demand period for U.S. gas consumption. However, a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel.
Natural gas futures are down nearly 30% so far this year as weak winter heating demand, near-record production and record-high storage levels dragged down prices.
Elsewhere on the Nymex, crude oil for delivery in April shed 81 cents, or 2.12%, to trade at $37.48 a barrel, while heating oil for April delivery lost 1.53% to trade at $1.213 per gallon.