Investing.com - The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 119 billion cubic feet in the week ended February 2, while analysts had forecast a decline of 116 billion.
That compared with a draw of 99 billion cubic feet (bcf) in the preceding week and represented a decline of 503 billion from a year earlier and was also 393 bcf below the five-year average.
Total U.S. natural gas storage stood at 2.078 trillion cubic feet, 19.5% lower than levels at this time a year ago and also 15.9% below the five-year average for this time of year.
After the report, prices initially spiked in a knee-jerk reaction. However, by 10:36AM ET (15:36GMT) natural gas for delivery in March on the New York Mercantile Exchange gained 2.3 cents, or about 0.9%, to trade at $2.725 per million British thermal units.
Futures had been rising by 3.6 cents, or about 1.3%, at $2.738 prior to the release of the supply data.
The commodity has been on the backfoot this week after weather forecasts showed that temperatures across key parts of the U.S. won't be as cold as previously expected.
Updated weather forecasting models showed that temperatures won't be as cold as previously expected through both the upcoming six- to 10-day and eight- to 14-day periods.
Bearish speculators are betting that the mild weather will reduce winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.