-- US natural gas futures fell sharply on Thursday, dropping over 5% by midday after government data showed a bigger-than-expected weekly injection into storage.
The front-month Henry Hub contract and the continuous contract were both down 5.18% at $2.58 per million British thermal units.
The move followed bearish data from the US Energy Information Administration showing that natural gas inventories in underground storage rose by 103 billion cubic feet for the week ended April 17. That compares with expectations for a 95-98 Bcf build. Stockpiles now stand at 2,063 Bcf.
The injection pushed inventories 142 Bcf above year-ago levels and 137 Bcf above the five-year average. It also exceeded both last year's build of 77 Bcf and the five-year average injection of 64 Bcf.
On the weather front, NatGasWeather said the US will remain warm through Friday, except for the Northern Plains. A colder pattern is expected to spread into the Midwest and Northeast over the weekend and persist into next week, shifting national energy demand from light to moderate starting Saturday.
The mild spring pattern has continued to suppress heating demand, allowing for above-normal storage injections. Trading Economics said total inventories are now about 7.1% above typical seasonal levels.
On the supply side, output has fallen by roughly 3.8 billion cubic feet per day over the past 17 days, reaching an 11-week low of 108.3 Bcf/d. At the same time, LNG feedgas flows have climbed to 18.9 Bcf/d so far in April, with the month tracking toward a potential record, according to Trading Economics.