Natural gas futures are finishing the holiday-shortened trading week in the red after the US government reported a larger-than-expected increase in domestic inventories. The energy commodity will still record a double-digit weekly gain on reports of declining American output levels.

May natural gas futures shed $0.043, or 2.41%, to $1.74 per million British thermal units (btu) at 18:48 GMT on Thursday on the New York Mercantile Exchange. Natural gas is set for a weekly spike of 12%, paring its year-to-date loss of 20%.

According to the US Energy Information Administration (EIA), domestic stockpiles of natural gas surged by 38 billion cubic feet for the week ending April 3. The market had forecast a jump of 25 billion cubic feet. In total, US inventories stand at 2.024 trillion cubic feet, up 876 billion cubic feet from the same time a year ago. They are also 324 billion cubic feet above the five-year average.

The EIA recently published its Short-Term Energy Outlook report and projected that domestic production is projected to decrease by 4.4% to an average of 94.49 billion cubic feet per day in 2021. This would represent the largest annual slump since 1998. The EIA also believes the output will begin to fall this year due to prices slipping to multi-year lows.

Researchers are attributing the industry reversal to the tumbling global demand from the coronavirus pandemic’s economic fallout. They further explained that the level of drilling activity has dropped in recent weeks after companies announced initiatives to shed capital spending.

Overall, natural gas consumption is projected to contract 3.2% next year. This is the biggest yearly decline in nearly 20 years.

In other energy commodities, May West Texas Intermediate (WTI) crude oil futures fell $2.13, or 8.49%, to $22.96 a barrel. June Brent crude futures slumped $1.34, or 4.08%, to $31.53 a barrel. May gasoline futures were flat at $0.6793 a gallon. May heating oil futures plunged $0.03, or 2.86%, to $0.9827 a gallon.