U.S. natural gas futures are down by over 5% and retreated beneath the $3 level on Thursday after the U.S. Energy Information Administration announced that working gas in storage rose by 90 billion cubic feet (Bcf) to 3,433 Bcf as of September 12. Analysts were expecting an average increase of 78 Bcf, with the data signaling lower-than-expected demand for natural gas.
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Storage of the commodity is down by 4 Bcf year-over-year and is 204 Bcf above the five-year average of 3,229 for this time of the year.
Natural Gas Slides Despite Elevated Temperatures
The unexpected data comes despite weather forecasts showing higher-than-expected temperatures for the remainder of September.
“National demand will be a little stronger than normal the next seven days as very warm to hot highs of mid-80s to 100s covers most of the interior U.S.,” said NatGasWeather in a note.
The market reaction reflects concerns that the warmer weather alone may not be enough to tighten supply in light of significant inventories.
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