Natural-gas held to early losses Thursday after a government report
showed U.S. gas stockpiles rose by slightly less than normal for this
time of year.
The U.S. Energy Information Administration said domestic
inventories of natural gas rose by 88 billion cubic feet in the week
ended May 24 to 2.141 trillion cubic feet. The injection met analysts'
average forecast, and was just short of the five-year average injection
of 92 bcf for the week.
Analysts and traders said the report offered little in the way
of surprises, but some noted that the injection, which was larger than
last year's 72-bcf build, may signal that demand this summer is likely
to fall below that of 2012.
"It was right in line with expectations, but it's a little bit
bearish because it confirms there are much stronger injections than we
saw last year," said Kent Bayazitoglu, an energy analyst at Gelber &
Associates in Houston. "We're going to see a much more positive season,
as far as injecting gas is concerned."
Natural gas for July delivery was recently 8.6 cents, or 2.1%,
lower at $4.098 a million British thermal units on the New York
Mercantile Exchange.
Front-month futures prices are on pace to fall for the
fourth-straight session. After surging higher for most of 2013, futures
are holding in a relatively tight trading range roughly between
$4.00/MMBtu and $4.30/MMBtu.
Over the past year, low prices prompted utilities and other
energy consumers to increase their gas usage. And a cold end to winter
wiped out the remaining gas surplus.
But with prices back above $4, investors are cautious about
betting on further gains. Many believe that domestic producers will
increase output if futures move higher. And higher prices may also
dissuade utilities from switching to natural gas from coal.