Natural gas drops as supplies rise in line with expectations
Published May 30, 2013 02:34PM ET
In the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD4.021 per million British thermal units, down 3.91%.
The commodity hit a session low of USD4.013 and a high of USD4.184.
The U.S. Energy Information Administration said in its weekly report earlier that natural gas storage in the U.S. in the week ending May 24 rose by a healthy 88 billion cubic feet, broadly in line with market expectations.
Inventories rose by 72 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 92 billion cubic feet.
Total U.S. natural gas storage stood at 2.141 trillion cubic feet as of last week. Stocks were 664 billion cubic feet less than last year at this time and 88 billion cubic feet below the five-year average of 2.229 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 110 billion cubic feet below the five-year average, following net injections of 53 billion cubic feet.
Stocks in the Producing Region were 25 billion cubic feet below the five-year average of 876 billion cubic feet after a net injection of 23 billion cubic feet.
Calls for cooler temperatures in parts of the U.S. added to the selloff.
Weather forecasting models continued to point to above-normal temperatures across most of the U.S. over the next five days, before giving way to below-normal temperatures later.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning, though cooler temperatures even in parts of the U.S. can wipe out gains easily this time of year.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July were up 0.52% and trading at USD93.62 a barrel, while heating oil futures for July delivery were down 0.69% at USD2.8450 per gallon.
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Written By: Investing.com
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