29 April 2010 21:50 [Source: ICIS news]
HOUSTON (ICIS news)--US natural gas futures slipped below $4/MMBtu on Thursday as domestic stockpiles grew more than expected and sent prices spiralling downward.
The Energy Information Administration (EIA) said in its weekly report that underground storage in the US added 83bn cubic feet (bcf) during the week ended 23 April.
The June contract plummeted by 36.8 cents to finish the session at $3.980/MMBtu. Thursday was the first day of trading with June as the front month benchmark.
The July price dropped 36.1 cents to settle at $3.980/MMBtu.
"The natural gas market has a well-deserved reputation for turning and twisting when you least expect it," Martin King, analyst with FirstEnergy Capital investment bank in Calgary, Alberta, wrote in a research note.
Last week's build put natural gas storage levels 5.6% higher than the same week last year and 18.8% above the five-year average, the EIA reported.
Low heating and cooling demand for electricity kept the injection number high, according to an analyst.
"Demand last week from the grid was 2.9% below the corresponding report from a year ago," wrote Stephen Schork, editor of the energy newsletter The Schork Report. “In fact, power demand last week, 65,592 gigawatt hours, was the lowest amount of electrons transmitted since May 2005."
Natural gas pricing is important for petrochemical producers who use the fuel as a power source and feedstock.
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