By Barani Krishnan
Investing.com -- Natural gas futures closed down a second straight day on Thursday after briefly breaking below the key $2 support as the U.S. government reported the first spring season injection of gas into storage tanks already bloated from underutilization of the fuel for heating during the winter.
Natural gas for May delivery settled down 8.6 cents, or 4%, at $2.007 per mmBtu, or metric million British thermal units, adding to the prior 4% slide from Wednesday. Thursday’s session low was $1.996.
The latest drop in gas prices came after the U.S. Energy Information Administration, or EIA, reported that gas-in-storage in the United States rose by 25 billion cubic feet, or bcf, last week in the first series of injections for the spring season.
While that build was smaller than the 28-bcf injection forecast for industry analysts, what weighed on market sentiment was the size of gas inventories as a whole.
Last week’s injection took the balance in gas storage to 1.855 trillion cubic feet, or tcf, the EIA said.
That was 33% above the year-ago storage level and nearly 19% higher than the five-year average for gas inventories.
The 2023 pre-summer injection season is starting with one of the most bloated gas storages, courtesy of a winter that ran mostly warm, with one of the fewest snow storms ever.
Typically, this is a time when storage is at seasonal lows after large and consistent withdrawals during winter, when gas is burned for heating.
“Future builds are also expected to be slightly larger than normal due to warmer average temperatures across the US and could put surpluses back above 350 bcf,” said Houston-based energy markets advisory Gelber & Associates.