US natural gas futures slipped about 2 percent on Thursday as inventories reached an all-time high and expectations for mild weather and light heating demand would allow stocks to rise further in coming weeks. The US Energy Information Administration said utilities added 54 billion cubic feet of gas into storage during the week that ended on November 4, in line with analyst estimates for a build of 53 bcf in a Reuters poll.
That compared with builds of 54 bcf in the prior week, 55 bcf a year earlier and a five-year average of 38 bcf. Stockpiles hit 4.017 trillion cubic feet, topping the previous record of 4.009 tcf set during the week that ended on November 20, 2015. Front-month gas futures for December delivery on the New York Mercantile Exchange fell 5.8 cents, or 2.2 percent, to settle at $2.632 per million British thermal units.
With storage at record levels and forecasts for warmer-than-normal temperatures in November, December, February and March, analysts said many traders have already given up on their earlier bullish bets for this winter. Weeks of mild weather have pushed the December contract down by as much as 18 percent since it became the front-month on October 28, dragging winter futures down with it. That has allowed calendar 2018 to trade at a premium to 2017 for the first time since June.
Analysts projected inventories would approach 4.1 trillion cubic feet later this month, topping the all-time high of 4.009 tcf set in November 2015. Stockpiles will probably remain near record highs until January, analysts said, with the latest long-term forecasts calling for weather to stay warmer-than-normal through December before turning colder-than-normal in January.
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