By Barani Krishnan
Investing.com -- Utilities drew a higher-than-forecast 151 bcf, or billion cubic feet, from U.S. natural gas storage for heating and electricity generation last week, according to government data that helped the market trade higher from 22-month lows.
Analysts tracked by Investing.com had expected the EIA, or Energy Information Administration, to report a draw of 142 bcf for the week ended Jan. 27, above the consumption of 91 bcf seen in the prior week to Jan. 20.
The front-month March gas contract on the New York Mercantile Exchange’s Henry Hub was up 6.9 cents, or 2.8%, to $2.537 per mmBtu, or metric million British thermal units, some 10 minutes after the data released by the EIA at 10:35 ET (15:35 GMT) on Thursday.
The benchmark gas futures had plunged to a 22-month low of $2.437 earlier on Thursday. The last time a benchmark gas contract on the Henry Hub had traded lower was on March 18, when it fell to $2.422.
An unusually warm start to the 2022/23 winter has led to considerably less heating demand in the United States versus the norm, leaving more gas in storage than initially thought.
At the close of last week, U.S. gas storage stood at 2.583 tcf, or trillion cubic feet, up 9.4% from the year-ago level of 2.361 tcf, EIA data showed.
Responding to the warmth and lackluster storage draws, gas prices plunged from a 14-year high of $10 per mmBtu in August, reaching $7 in December and mid-$2 levels this week despite growing forecasts for bitter cold later this month.