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Natural Gas Tumbles Despite Larger-Than-Expected Drop in Stocks

February 15, 2018 at 17:54 by Andrew Moran

Natural gas futures initially traded higher following a new US government report, but they have since pared those gains. Natural gas prices declined to their lowest points since August 2016 earlier this week, but they are still hovering around the important $2.60 threshold.

March natural gas futures tumbled $0.024, or 0.93%, to $2.563 per million British thermal units (btu) on Thursday on the New York Mercantile Exchange. Natural gas prices have plunged nearly $1 over the last month, trading at 18-month lows. Natural gas has also plummeted more than 11% year-to-date.

According to the US Energy Information Administration (EIA), natural gas experienced a larger-than-expected decrease in underground stockpiles as inventories fell by 194 billion cubic feet for the week ending February 9. Total natural gas supplies stand at just under two trillion cubic feet.

Industry observers note that investors are trying to weigh record output figures, limited seasonal demands, a decline in storage levels, historic exports, and the power sector’s transition from coal to gas.

On Wednesday, the EIA reported that US crude supplies climbed by 1.8 million barrels, while US oil production surpassed 10.27 million barrels per day (bpd). Gasoline stockpiles advanced by 3.6 million barrels, while distillate supplies jumped 500,000 barrels.

March West Texas Intermediate (WTI) crude futures rose $0.19, or 0.31%, to $60.78 per barrel, and April Brent crude futures slipped $0.35, or 0.54%, to $64.01 a barrel.

In other energy markets, March gasoline futures rose $0.0127, or 0.74%, to $1.7257 per gallon, and March heating oil futures dipped $0.0047, or 0.25%, to $1.88 a gallon.

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