Natural gas futures traded relatively flat in the middle of the holiday-shortened trading week despite the second supply withdrawal in the last three weeks. After a significant rally for the energy commodity, it has been sliding. However, it is again above the critical $3 mark heading into the final month of 2023, with traders combing through all of the weather forecasts for the 2023-2024 winter season.
January natural gas futures dipped $0.015, or 0.49%, to $3.0185 per million British thermal units (Btu) to finish the Wednesday trading session on the New York Mercantile Exchange. Natural gas is poised for a weekly decline of around 6% and is down 25% year-to-date.
According to the US Energy Information Administration (EIA), domestic inventories of natural gas declined by seven billion cubic feet for the week ending Nov. 17, down from the previous week’s massive build of 60 billion cubic feet. This also came in short of the consensus estimate of a seven-billion-cubic-foot increase.
In total, US natural gas stands at 3.826 trillion cubic feet, up 251 billion cubic feet from the same time a year ago. They are also 249 billion cubic feet above the five-year average of 3.577 trillion cubic feet.
Natural gas prices have mainly come under pressure on robust production data in the US. However, in the last couple of weeks, there has been a tepid retreat on the domestic output front. At the same time, this was offset expectations that there will be mild weather in December, limiting the number of heating demand days.
The Total Baker Hughes Rig Count, which includes natural gas drilling activity, edged up by four to 622 for the week ending 622.
In other energy commodities, December West Texas Intermediate (WTI) crude oil futures fell $0.91, or 1.18%, to $76.19 per barrel in overnight trading. January Brent crude futures plunged $1.07, or 1.31%, to $80.89 a barrel in overseas trading. December gasoline futures shed $0.0248, or 1.11%, to $2.2076 per gallon. December heating oil futures dropped $0.0312, or 1.11%, to $2.7732 a gallon.