NYMEX natural gas slumped over 2% to trade near $3.3/mmBtu levels. Price came under pressure post weekly inventory report.
US EIA weekly report noted an 81 Bcf decline in US natural gas stocks as against market expectation of 77 Bcf decline. The stock buildup was however less than 5-year average decline of 218 Bcf.
A smaller than average decline has narrowed the deficit to 5-year average stocks easing tightness concerns to some extent. The average rate of net withdrawals from storage is 31% lower than the five-year average so far in the withdrawal season (November through March).
US natural gas stocks now stand at 2533 Bcf which is 3% lower than stocks same period last year and 11.4% lower than 5-year average stocks for this time of the year.
Natural gas rallied sharply in last few days as winter storm in US led to severe cold weather in Midwest and Eastern US. While cold weather is expected to continue in the near term, market reaction has subsided leading to correction in price