NEW YORK: US natural gas futures eased about 1% on Thursday, paring bigger losses earlier in the session on a federal report showing a slightly bigger-than-expected storage draw last week and rising output.
Front-month gas futures for March delivery on the New York Mercantile Exchange fell 1.7 cents, or 0.5%, to $3.343 per million British thermal units (mmBtu) at 10:33 a.m. EST (1533 GMT). On Wednesday, the contract closed at its highest since January 29.
Before the US Energy Information Administration (EIA) released the storage report, the front-month was down about 1.1%.
The price decline came despite rising flows to liquefied natural gas (LNG) export plants and forecasts for colder weather and higher heating demand over the next two weeks than previously expected. EIA said energy firms pulled 174 billion cubic feet (bcf) of gas out of storage during the week ended January 31.
That was slightly higher than the 168-bcf draw analysts forecast in a Reuters poll and compares with a drop of 110 bcf during the same week last year and a five-year average draw of 174 bcf for this time of year. After extreme cold late last month boosted heating demand to a record high, analysts said energy firms may have pulled a record amount of gas out of storage in January. The current record monthly storage withdrawal is 994 bcf in January 2022, according to federal energy data.
Financial firm LSEG said average gas output in the Lower 48 US states rose to 106.2 billion cubic feet per day (bcfd) so far in February, up from 102.7 bcfd in January when freezing oil and gas wells and pipes, known as freeze-offs, cut production.
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