Investing.com - Natural gas futures plunged on Thursday, falling to the lowest levels of the session after data showed a surprise buildup in U.S. supplies in storage last week.
U.S. natural gas futures sank 14.0 cents, or around 4.8%, to $2.781 per million British thermal units by 10:40AM ET (1540GMT), after hitting their lowest level since Aug. 7 at $2.768. Futures were at around $2.790 prior to the release of the supply data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 2 billion cubic feet (bcf) in the week ended Dec. 1, confounding forecasts for a withdrawal of 7 bcf.
That compared with a drop of 33 bcf in the preceding week, a fall of 42 bcf a year earlier and a five-year average decline of 69 bcf.
Total natural gas in storage currently stands at 3.695 trillion cubic feet (tcf), according to the U.S. Energy Information Administration. That figure is 264 bcf, or around 6.6%, lower than levels at this time a year ago and 36 bcf, or roughly 1%, below the five-year average for this time of year.
Analysts estimated the amount of gas in storage would end the April-October injection season at 3.8 tcf due primarily to higher liquefied natural gas shipments abroad. That would fall short of the year-earlier record of 4.0 tcf and the five-year average of 3.9 tcf.
Futures notched a minor gain of 0.3% on Wednesday, as market players continued to monitor winter weather forecasts to gauge demand for the fuel.
Natural gas futures have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand.
Prices of the fuel typically rise ahead of the winter as colder weather sparks heating demand. The heating season from November through March is the peak demand period for U.S. gas consumption.