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Natural gas futures tumble 2% after bearish storage data

CommoditiesFeb 12, 2015 10:33AM ET
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Natural gas futures extend losses after weekly storage report - Natural gas futures extended losses 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 5.1 cents, or 1.82%, to trade at $2.746 per million British thermal units during U.S. morning hours. Prices were at $2.790 prior to the release of the supply data.

Natural gas hit a session high of $2.882 earlier, the most since January 29.

Futures were likely to find support at $2.685 per million British thermal units, the low from February 11, and resistance at $2.924, the high from January 29.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended February 6 fell by 160 billion cubic feet, below expectations for a decline of 168 billion.

Natural gas storage in the U.S. fell by 115 billion cubic feet in the preceding week. Inventories fell by 234 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 178 billion cubic feet.

Total U.S. natural gas storage stood at 2.268 trillion cubic feet. Stocks were 542 billion cubic feet higher than last year at this time and 11 billion cubic feet below the five-year average of 2.279 trillion cubic feet for this time of year.

A day earlier, natural gas surged 12.0 cents, or 4.48%, to settle at $2.797 after updated weather forecasting models pointed to frigid weather spanning from the Great Lakes-region to the Northeast through February 19.

Bullish speculators are betting on the cold weather boosting winter demand for the heating fuel.

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 March rallied $1.10, or 2.25%, to trade at $49.94 a barrel, while heating oil for March delivery jumped 2.86% to trade at $1.866 per gallon.

Natural gas futures tumble 2% after bearish storage data

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