Natural gas futures were up 1% on Thursday after the US government registered the largest storage drawdown on record. Natural gas has been highly volatile so far this year, fueled by a severe winter storm that caused more than $100 billion in damage and economic losses.
March natural gas futures rose $0.031, or 0.89%, to $3.496 per million British thermal units (Btu) at 20:27 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices had sunk as much as 3% following a lower-than-expected storage print.
Natural gas is poised to register a weekly loss of almost 10%, but remains up nearly 11% this year.
For the week ending January 30, domestic natural gas inventories declined by 360 billion cubic feet, down from the previous week’s drawdown of 242 billion cubic feet, according to the US Energy Information Administration. This was the largest withdrawal in US history.
The drawdown was broad-based, with the biggest declines posted in the South Central (159 billion cubic feet), the Midwest 92 billion cubic feet), and the East (75 billion cubic feet).
In total, US natural gas supplies stand at 2.463 trillion cubic feet, up 41 billion cubic feet from the same time a year ago. They are also 27 billion cubic feet below the five-year average of 2.49 trillion cubic feet.
The lackluster response to the storage drawdown was driven by investors hoping it would be larger than the consensus forecast. Additionally, much of the information was already priced in during the 120% rally last month.
Looking ahead, forecasts suggest milder weather in the middle of the month, especially in the northeastern United States. This could limit price gains, especially as most of the production lost during the storm has returned to service.
In other energy commodities, crude oil prices struggled to find direction, wobbling between positive and negative territory.
March West Texas Intermediate (WTI) crude oil futures declined $2.02, or 3.1%, to $63.12 per barrel. April Brent crude futures slipped $0.19, or 0.28%, to $67.36 a barrel. March gasoline futures erased $0.0403, or 2.05%, to $1.9249 a gallon. March heating oil futures declined $0.0796, or 3.22%, to $2.3904 per gallon.