10 September 2009 17:21 [Source: ICIS news]
HOUSTON (ICIS news)--US natural gas futures prices swung into positive territory on Thursday following a less-than-expected build in underground storage in the week ended 4 September, according to the Energy Information Administration (EIA).
The EIA reported a 69bn cubic feet (bcf) injection after industry analysts predicted anywhere from a 59-100 bcf build last week with average estimates in the mid-70s bcf.
Shortly after the announcement that put total US natural gas storage at 3,392 bcf, October natural gas prices on the NYMEX jumped up 4.6 cents to trade at $2.874/MMBtu.
Last week's injection period tends to be the largest of the season after the US Fourth of July holiday because it included the Labor Day holiday, according to Stephen Schork, editor of the energy newsletter The Schork Report.
Last year during the same week, underground storage grew by 58 bcf. The five-year average for the same week is 84 bcf.
Front-month futures prices did not climb above the $3/MMBtu plateau, which it has been consistently trading under for three weeks.
Low natural gas prices have caused petrochemical producers to rethink their raw material choices by utilizing cheaper, natural gas liquids as opposed to oil-based feedstocks.
The weekly EIA report underscored the record-high natural gas stocks in the US that have suppressed futures values.
Storage levels as of last week were 17.1% higher than the same time during 2008 and 17.4% above the five-year average, according to the EIA.
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