U.S. April Natural gas futures touched a three-month low this week, after the release of a disappointing U.S. government report showed supplies in storage fell less than expected the previous week.
According to the U.S. Energy Information Administration, natural gas in storage declined by 114 billion cubic feet in the week-ended February 10, below the forecast for a drawdown of 124 billion cubic feet.
Last week, the report showed a withdrawal of 152 Bcf during the week-ending February 3. A year ago the draw was 163 billion Bcf. The five-year average for this time of year is 156 Bcf.
The EIA report also revealed that total gas in storage currently stands at 2.445 trillion cubic feet. This is about 12.4% lower than levels reached a year ago and 3.5% above the five-year average for this time of year.
Looking ahead to next week’s report, based on temperatures the week-ending February 17, we’re likely to see another low draw figure. Next week’s EIA report could show a draw of about 83 Bcf.
The catalyst behind the selling pressure are the warmer than normal temperatures. According to the National Weather Service’s eight to 14 day forecast, cooler weather will move east toward the Rockies, but the high-demand areas in the eastern U.S. will continue to see above-average temperatures.
The recent price action on the charts suggests the last of the speculators, who were drawn into the market on the hopes of an Arctic blast,…