US Natural Gas Prices Drop 3.7% Following Higher-Than-Expected Storage Build

US Natural Gas Prices Decline 3.7% Following Unexpectedly High Storage Data

US natural gas futures dropped 3.7% on the day following the release of the Energy Information Administration (EIA) storage data, which showed a larger-than-anticipated increase in gas inventories. According to the EIA, natural gas in storage increased by 110 billion cubic feet (bcf) last week, significantly higher than the 5-year average increase of 83 bcf. While this build was expected, it did little to alleviate concerns regarding the ongoing supply issues in the natural gas market.

The current level of natural gas storage stands at 2.255 trillion cubic feet (tcf), which is 2.4% above the 5-year average. However, it is still 14.3% below the same period last year, pointing to the ongoing shortage compared to historical levels. This shortfall continues to raise concerns, as the market remains vulnerable despite the recent increase in inventories.

The market's reaction indicates that traders are still worried about potential supply risks in the future, particularly in light of the year-on-year inventory deficit, which could affect prices in the longer term. The 3.7% drop in prices highlights the cautious sentiment in the natural gas market, which remains vulnerable to fluctuations in supply and demand.