Investing.com - Natural gas futures turned lower on Thursday, erasing gains of more than 2% after data showed U.S. natural gas supplies in storage fell less than expected last week.
Natural gas for delivery in January on the New York Mercantile Exchange shed 0.4 cents, or 0.2%, to trade at $1.786 per million British thermal units during U.S. morning hours. Prices were at around $1.832 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. in the week ended December 11 fell by 34 billion cubic feet, below expectations for a decline of 40 billion.
That compared with a drawdown of 76 billion cubic feet in the prior week, 61 billion cubic feet in the same week last year, while the five-year average change for the week is a decline of 120 billion cubic feet.
Total U.S. natural gas storage stood at 3.846 trillion cubic feet, 14.1% higher than levels at this time a year ago and 8.4% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have more than made up for all of last winter's unusually strong demand.
Inventories of the gas are typically built up during the warm summer months and then drawn down in the winter as cold temperatures increase demand for the fuel.
On Wednesday, futures fell to $1.775, a level not seen since September 2001, before ending at $1.790, down 3.2 cents, or 1.76%. Prices of the fuel are down 43% so far this year as weak demand and healthy stockpiles weighed.
The East Coast is projected to see temperatures 15 to 20 degrees above normal this week and warm weather is also expected in the Midwest.
Bearish speculators are betting on the warm pre-winter weather to dampen demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas prices typically rise ahead of the winter as colder weather sparks heating demand, yet an unusually mild start to winter due to the El Niño weather phenomenon has limited the amount of heating days.
Elsewhere on the Nymex, crude oil for delivery in January dipped 44 cents, or 1.24%, to trade at $35.08 a barrel, while heating oil for January delivery jumped 1.46% to trade at $1.129 per gallon.
Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com apps for Android and iOS! http://glocdn.investing.com/news/LYNXNPEB720FY_M.jpg