Natural gas on a steep fall following EIA’s report

Natural gas plunged more than 4% on Thursday after the EIA said in its weekly report that natural gas inventories rose more than expected during the week ending June 21.

On the New York Mercantile Exchange, natural gas for August delivery traded at $3.576 per million British thermal units at 15:19 GMT, down 4.32% on the day. Prices ranged between days high at $3.754 and low of $3.569 per mBtu, a 16-week low. The fuel marked a 1.64% daily gain on Wednesday and settled last week 1.46% higher. So far this week, however, prices have plunged more than 5.5%.

In its weekly natural gas inventories report today, the Energy Information Administration said the working gas in underground storage totaled 2.533 billion cubic feet as of June 21. This was 17.1% lower than the comparable week last year when natural gas stockpiles stood at 3 055 billion cubic feet and marked a 58 billion gain. The five-year average inventories stand 1.2% higher at 2 564 billion and the average gain equaled 79 billion. The Natural Gas Storage Indicator rose by 95 billion cubic feet last week, up from 91 billion during the preceding period and above expectations of an 88 billion gain.

Natural gas prices were also pressured as weather forecasting models pointed at seasonal or below-seasonal temperatures in the eastern part of the country over the next six to fifteen days, which would falter demand for the fuel. Gas prices tend to rise during the summer season as increased electricity demand to power air-conditioning calls for more supply of the fuel, which is used for a quarter of the U.S. electricity generation.

Elsewhere on the New York Mercantile Exchange, WTI crude for August delivery traded 1.01% higher on the day at 15:13 GMT, standing at $96.46 per barrel. Prices ranged between days high and low at $96.54 and $95.36 respectively. Meanwhile, Brent oil jumped by 0.87% by 15:18 GMT, trading at $102.55 a barrel. The European benchmark varied during the day between $101.68 and $102.62.