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FINWIRES

Natural Gas Falls to Lowest in Nearly Six Years on Mild Forecasts and Rising Inventories

-- Natural gas traded at the lowest level in nearly six years early Friday on mild forecasts and after a day-prior report showed a larger than expected rise in U.S. inventories last week.

Gas for May delivery was last seen down $0.05 to US$2.56 per million British thermal units, the lowest since June, 2020.

The drop follows on Thursday's weekly inventory report from the Energy Information Administration. The agency said stocks of the fuel rose by 103-billion cubic feet last week, well above the five-year average for the week and leaving inventories 7.1% above the five-year average.

"The stock build reinforced concerns about oversupply, driven by mild seasonal weather and soft demand, even as drillers have started curbing activity in response to weaker prices," Saxo Bank noted.

Long-term forecasts also offered little support to gas. The National Weather Service's six to 14 day outlook expects states east of the Rocky Mountains to see seasonal or cooler temperatures over the period, keeping cooling demand light.

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