Natural gas down 4%; stockpile drop is smaller than forecast
NEW YORK -- Natural gas futures fell 4% Thursday after a weekly withdrawal from U.S. gas stockpiles came in below forecasts, signaling weak demand.
Natural gas in U.S. storage fell by 157 Bcf in the week ended Feb. 8, according to data released Thursday by the U.S. Energy Information Administration.
Analysts' average estimates were calling for a 161-Bcf drop in the week ended Feb. 8.
Gas inventories have fallen by a smaller amount than analysts expected for the past three weeks, raising concerns that natural gas demand isn't keeping pace with supplies. The winter is the time of year with the highest fuel usage, and the modest withdrawals have increased expectations of high supplies as the end of the season approaches.
"People are getting nervous about the large amount of gas in storage," said Aaron Calder, an energy-market analyst at Gelber and Associates in Houston.
Natural gas for March delivery was recently 13.1 cents lower at $3.175 per MmBTU on the New York Mercantile Exchange, on pace for the lowest settlement since early January.
Total stockpiles fell to 2.527 Tcf, 9.7% below the record levels hit last year but 16% above the five-year average for this time of year.
Some traders are now expecting total inventories will end the winter above 2 Tcf, a key level that would suggest the market is well supplied.
"With slightly more than a month remaining in this winter's heating season and more than ample supplies of gas in storage, gas prices are likely to come under increasing pressure," said analysts at Tradition Energy in a research report.
Dow Jones Newswires