Natural gas futures are barely reacting to a considerable and larger-than-expected supply withdrawal as investors continue to wait for significant winter weather to blanket the country. With robust production across the country, traders are unconvinced that market conditions are under any kind of threat.
January natural gas futures were flat at $2.56 per million British thermal units (Btu) at 14:48 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices are on track for a weekly loss of 8.5%, adding to their year-to-date drop of 37%.
According to the US Energy Information Administration (EIA), domestic inventories of natural gas declined 117 billion cubic feet for the week ending December 1, down from the previous week’s build of ten billion cubic feet. This was worse than the consensus estimate of a drawdown of 105 billion cubic feet.
In total, US supplies of natural gas stood at 3.719 trillion cubic feet, up 254 billion cubic from the same time a year ago. They are also 234 billion cubic feet above the five-year average of 3.485 trillion cubic feet.
There were supply withdrawals across the country: East (-39 billion cubic feet), Midwest (-29 billion cubic feet), Mountain (-7 billion cubic feet), Pacific (-9 billion cubic feet), and South Central (-32 billion cubic feet).
While overall energy commodities have been tanking in recent weeks, natural gas is struggling to find direction since sliding below $3 again. Traders in the so-called bridge fuel are combing through the latest weather forecasts to determine how severe this year’s winter conditions will be.
That said, US output has remained strong, hovering around 100 billion cubic feet per day. The challenge, however, could be the lack of natural gas infrastructure to support production and exports.
In other energy markets, January West Texas Intermediate (WTI) crude oil futures jumped $0.54, or 0.78%, to $69.96 per barrel. February Brent crude futures rose $0.49, or 0.66%, to $74.79 a barrel. January gasoline futures were flat at $2.0277 per gallon. January heating oil futures were also unchanged at around $2.58 a gallon.