The latest Energy Information Administration (EIA) natural gas storage data recorded a draw of 53 Billion Cubic feet (Bcf) for the week ending March 10th.
This was lower than the draw of 68 Bcf recorded last week and also below market expectations of a draw of around 60 Bcf.
Stocks are now 9.5% below the year-ago figure, but 21.4% above the five-year average from the 18.8% recorded last week.
Only the Pacific region has stocks below the 5-year average with stocks in the Midwest 35.5% above the average.
On seasonal grounds, there should be a relatively close balance in inventories over the next few weeks with net weather conditions cold enough to prevent a significant increase in stocks, but not cold enough to trigger a substantial draw. Any further winter storms could have an important impact in supporting prices in the short term.
Natural gas prices took advantage of a weaker dollar following Wednesday’s Federal Reserve rate decision with the overall tone less hawkish than expected pushing the US currency weaker and providing wider support across the energy and commodity sectors.
Prices, however, hit further resistance close to the $3.00 per mBtu level, failing to break higher after a brief move above this level earlier in the day.
There was a significantly weaker trend on Thursday with overall weather conditions not seen as a cold enough to support the overall demand/supply balance sufficiently to raise prices. Crude oil prices were unchanged on the day and commodity prices overall remain higher, but natural gas was unable to take advantage.
Overall, natural gas declined to lows at $2.90 per mBtu before consolidating around $2.92.
Prices dipped lower following the storage data with a dip to below the $2.90 level, although prices did find some support below this level.