From the Wakk Street Journal:
Natural-gas futures extended losses after U.S. inventory data showed gas storage levels at 17% above the five-year average level.
The Energy Information Administration said the level of working gas in storage last week fell by 95 billion cubic feet, in line with estimates gathered by Dow Jones Newswires for an 89 billion cubic feet withdraw. At 3.377 trillion cubic feet, gas storage is 13.4% above a year ago and 17% above the five-year average for the week.
The latest storage drawdown was well below the year-ago level of 137 billion cubic feet and the five-year average of 128 billion cubic feet.
Persistent warm weather across much of the U.S. has lowered residential demand for gas, meaning that companies need to withdraw less from storage to meet consumer demand. The lower-than-normal withdrawals come as natural-gas output has climbed to record levels, led by new supplies from drilling in shale-oil fields.
Front-month February natural-gas futures on the New York Mercantile Exchange had fallen by 9.4%, or nearly 29 cents per million British thermal units so far this week to 28-month lows.
February gas hit a fresh low of $2.676/mmBtu after the data and recently traded at $2.691/mmBtu, down 8.3 cents, or 3% from Wednesday's settlement.
Jim Ritterbusch, president of Ritterbusch & Associates, said a continuation of warm weather, high production and lofty storage levels could push front-month gas futures prices down to near the $2.40 per mmBtu level, where prices haven't settled at since March 2002.
Analysts said they see little prospect for a quick turnaround....MORE