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Natural Gas Falls 2% on Smaller-Than-Expected Supply Decline

March 15, 2018 at 16:31 by Andrew Moran

Natural gas futures are trading lower following a new US government report that found a smaller-than-expected decline in domestic stockpiles. Despite the tumultuous winter weather impacting many regions of the country, natural gas prices continue to be in the red in 2018.

April natural gas futures slipped $0.058, or 2.12%, to $2.673 per million British thermal units (btu) at 16:13 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices have had a terrible week, sliding nearly 3% over the last five trading sessions.

Year-to-date, natural gas has tumbled 2.5%.

According to the US Energy Information Administration (EIA), domestic natural gas supplies decreased 93 billion cubic feet for the week ending March 9, which is lower than the 100 billion drop market analysts had anticipated. Total stocks now stand at 1.532 trillion cubic feet, down 718 billion cubic feet from the same time a year ago. It is also 296 billion below the five-year average.

The stock market may be taking a hit on the news, but consumers who pay natural gas heating bills are celebrating the trend.

Last week, it was reported that industry exporters are expecting a significant boom period over the next several years, stemming from strong demand from China and other Asian nations. Natural gas businesses project exports to reach 3.6 billion cubic feet per day this year, and then soar to as much as 12 billion cubic feet within the next two to three years.

On Wednesday, the EIA reported that US oil stockpiles rose by five million barrels, while domestic crude production advanced 12,000 barrels to 10.381 million barrels per day (bpd). Oil is rallying towards the end of the trading week with April West Texas Intermediate (WTI) crude futures up at $61.31 a barrel and May Brent crude futures in positive territory at $65.21 per barrel.

In other energy markets on Thursday, April gasoline futures jumped $0.01, or 0.45%, to $1.932 per gallon. April heating oil futures also advanced $0.01, or 0.50%, to $1.90 a gallon.

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